Document:

EMPLOYMENT AGREEMENT

            
            THIS EMPLOYMENT AGREEMENT (the “Agreement”), made this
            1st ,day of May, 2007, between Douglas P. Morris (“Executive”)
            and BIO-PATH, Inc. (the “Company”).

            
            1.            
            Effective Date of Agreement. The Company hereby agrees to employ Executive, and
            Executive hereby accepts employment with the Company, upon the terms set forth in this
            Agreement.

            
            2.            
            At Will Employment. The Company agrees to employ Executive, and Executive agrees
            to serve the Company, on an “at will” basis, which means that either the
            Company or Executive may terminate Executive’s employment with the Company at any
            time and for any or no reason.

            
            3.            
            Title; Capacity. The Company will employ Executive, and Executive agrees to work
            for the Company, as its Vice President of Corporate Development to perform the duties
            and responsibilities inherent in such position and such other duties and
            responsibilities as the Board of Directors of the Company (the “Board”)
            shall from time to time reasonably assign to him. Executive shall report to the Board
            and shall be subject to the supervision of, and shall have such authority as is
            delegated to him by the Board, which authority shall be sufficient to perform his
            duties hereunder. Executive shall devote the time necessary and reasonable best efforts
            in the performance of the foregoing services, provided that he may accept Board
            memberships (following disclosure to, review by, and approval of the Board) or perform
            services for charitable organizations that are not in conflict with his primary
            responsibilities and obligations to the Company, in the discretion of the Company.

            	
                        
                         

                    	
                        
                        4.

                    	
                        
                        Compensation and Benefits.

                    

            
            4.1          
            Salary. The Company shall pay Executive an annual base salary of $120,000,
            payable monthly on the first of each and every month Such salary thereafter shall be
            subject to annual review and upward adjustment as determined in the discretion of the
            Board and/or President and CEO in each calendar year consistent with the management
            compensation practices and policies of the Company.

            
            4.2          
            Annual Incentive. Executive will be eligible to receive an annual cash
            performance bonus of between 10% and 20% of Executive’s annual base salary, in
            the sole discretion of the Board and based upon a set of tangible and intangible
            milestones and objectives.

            
            4.3          
            Fringe Benefits. Executive shall be entitled to participate in all bonus and
            benefit programs that the Company establishes and makes available to its executive
            employees, if any, to the extent that Executive’s position, tenure, salary, age,
            health and other qualifications make him eligible to participate, including, but not
            limited to, health care plans, life insurance plans, dental care plans, disability
            income plans, supplemental retirement plans, and all other

             

            

            
            
            

            

             

            benefit plans from
            time to time in effect generally for executives and/or employees of the Company. The
            Company shall, if requested by Executive, pay 100% of the premium cost for health
            insurance coverage for the first year of the Executive and Executive’s spouse
            participation in the plan. Thereafter, the Executive shall be subject to all such
            fringe benefits as defined by the Company’s employee manual, if any, and approved
            management and compensation policies and procedures. Executive shall also be entitled
            to take fully paid vacation in accordance with Company policy.

            
            4.4          
            Reimbursement of Business Expenses. Executive shall be reimbursed in accordance
            with Company policy for such reasonable business expenses as Executive documents in
            writing to the Company in a regular basis.

            
            5.            
            Termination of Employment. Executive’s employment with the Company
            (“Employment Period”) shall terminate upon the occurrence of any of the
            following:

            
            5.1          
            Voluntary Termination by Company or Employee. Either the Company or Employee may
            terminate the employment relationship at any time, without notice or without
            requirement for cause.

            
            5.2          
            Termination for Cause. The employment relationship may be terminated for Cause
            upon written notice by the Company to Executive. For the purposes of this Section 5.2,
            “Cause” for termination shall be deemed to exist upon the occurrence of any
            of the following:

            
            (a)           a
            good faith finding by the Company that Executive has engaged in any gross negligence,
            gross misconduct, tortuous act, unlawful act or malfeasance which causes or reasonably
            could cause material harm to the Company’s standing, condition or reputation;

            
            (b)          
            Executive’s conviction or entry of nolo contendere to any felony or crime
            involving moral turpitude, fraud or embezzlement;

            
            (c)          
            Executive’s material breach of this Agreement, which, if curable in the
            discretion of the Company’s Board of Directors, is not cured to the reasonable
            satisfaction of the Company’s Board of Directors within fifteen (15) days
            following Executive’s receipt of written notice from the Company stating with
            reasonable specificity the nature of such breach;

            
            (d)          
            Executive’s failure or refusal to comply with reasonable written policies,
            standards and regulations established by the Company from time to time which failure,
            if curable in the discretion of the Company’s Board of Directors, is not cured to
            the reasonable satisfaction of the Company’s Board of Directors within fifteen
            (15) days following Executive’s receipt of written notice of such failure from
            the Company;

             

            
            2

             

            

            
            
            

            

             

             

            
            (e)          
            Executive’s willful failure to perform his job duties and/or failure to follow
            instructions from the Board of Directors, as applicable; or

            	
                        
                         

                    	
                        
                        (f)

                    	
                        
                        Executive’s breach of any of the terms of the Confidentiality
                        Agreement.

                    

            
            5.3          
            Termination by Employee for Good Reason. The employment relationship may be
            terminated upon written notice by Executive to the Company for Good Reason (as defined
            below).

            
            5.4          
            Death or Disability. The employment relationship will terminate automatically
            upon Executive’s death or, upon thirty (30) days prior written notice from the
            Company, in the event of disability. As used in this Agreement, the determination of
            “disability” shall occur when Executive, due to a physical or mental
            disability, for a period of 90 consecutive days, or 180 days in the aggregate whether
            or not consecutive, during any 360-day period, is unable to perform the services
            contemplated under this Agreement. A determination of disability shall be made by a
            physician satisfactory to both Executive and the Company, provided that
            if Executive and the Company do not agree on a physician, Executive and the Company
            shall each select a physician and these two together shall select a third physician,
            whose determination as to disability shall be binding on all parties.

            	
                        
                         

                    	
                        
                        6.

                    	
                        
                        Effect of Termination.

                    

            
            6.1          
            Termination for Cause or Voluntary Termination by Executive. In the event that
            Executive’s employment is terminated for Cause pursuant to Section 5.2 or at the
            election of Executive pursuant to Section 5.1, the Company shall have no further
            obligations under this Agreement other than to pay to Executive the compensation and
            benefits, including payment for accrued but untaken vacation days, otherwise payable to
            him under Section 4.1 through the last day of his actual employment by the Company.

            
            6.2          
            Voluntary Termination by the Company or Termination by Employee for Good
            Reason.

            In the event that
            Executive’s employment is terminated by the Company pursuant to Section 5.1, or
            by the Employee for Good Reason pursuant to Section 5.3, the Company shall continue to
            pay to Executive an amount equivalent to three (3) months of his annual base salary
            then in effect for three (3) months in the manner set forth in Section 4.1, and payment
            for accrued but untaken vacation days as of his date of termination of employment,
            subject to Executive’s continued compliance with the Confidentiality Agreement
            and execution of a general release of all claims against the Company. In addition, the
            Company shall continue its contributions toward Executive’s health care, dental,
            disability and life insurance benefits on the same basis as immediately prior to the
            date of termination, except as provided below, for a period of three (3) months from
            the last day of Executive’s employment, subject to Executive’s continued
            compliance with the Confidentiality Agreement and execution of a general release of all
            claims against the Company. Notwithstanding the foregoing, the Company shall not be
            required to provide any health care, dental, disability or life insurance benefit
            otherwise receivable by Executive pursuant to this Section 6.2 if Executive is actually
            covered by an substantially similar

             

            
            3

             

            

            
            
            

            

             

            benefit (at or
            below the same cost to Executive, if any) from another employer during which continuing
            benefits are provided pursuant to this Section 6.2. Any such benefit made available to
            Executive shall be reported to the Company.

             

            
            6.3          
            Termination for Death or Disability. In the event that Executive’s
            employment is terminated by death or because of disability pursuant to Section 5.4, the
            Company shall pay to Executive’s estate or to Executive, as the case may be,
            compensation which would otherwise be payable to Executive under Section 4.1 of this
            Agreement through the end of the month in which such termination occurs, and payment
            for any accrued but untaken vacation days. Executive or his estate shall be entitled to
            continue health care benefits under COBRA, at Executive’s cost, to the extent
            required and available by law. . In addition to the foregoing, in the event of
            termination pursuant to Section 5.4, any unvested stock and stock options granted by
            the Company to Executive shall immediately vest as of the date of termination.

            	
                        
                         

                    	
                        
                        6.4

                    	
                        
                        Termination in the Event of a Change in Control.

                    

            
            (a)          
            In the event Executive’s employment with the Company is terminated by the Company
            (other than for Cause, disability or death as defined herein) or by Executive for Good
            Reason (as defined below) within three months before or 12 months following a Change in
            Control (as defined below), Executive shall be entitled to the following, subject to
            Executive’s continued compliance with the Confidentiality Agreement and execution
            of a general release of all claims against the Company:

            
            (i)           
            Any unvested stock or stock options awarded to Executive by the Company
            shall immediately vest upon the occurrence of such termination; and

            
            (ii)          
            the Company shall pay to Executive within fourteen (14) days after
            delivery of a written notice of his termination any and all compensation which would
            otherwise be payable to Executive under Section 4.1 of this Agreement through the
            termination date, and payment for any accrued but untaken vacation days, in each case
            to the extent not yet paid; and

            
            (iii)        
            the Company shall pay Executive’s normal post-termination benefits
            in accordance with the Company’s retirement, insurance and other benefit plan
            arrangements (including non-qualified deferred compensation plans); and

            
            (iv)         
            The Company shall pay to Executive the equivalent of his average annual
            base salary for a period of three (3) months; and

            
            (v)          
            for six (6) months after Executive’s date of termination, or such
            longer period as may be provided by the terms of the appropriate plan, program,
            practice or policy, the Company shall continue Executive’s

            
             

            
            4

             

            

            
            
            

            

             

            
            health care, dental, disability and life insurance benefits on the same
            basis as immediately prior to the date of termination;
            provided,
            however, the Company shall not be required
            to provide any health care, dental, disability or life insurance benefit otherwise
            receivable by Executive pursuant to this Section 6.5(a)(v) if Executive is actually
            covered by an substantially similar benefit (at or below the same cost to Executive, if
            any) from another employer during which continuing benefits are provided pursuant to
            this Section 6.5(a)(v). Any such benefit made available to Executive shall be reported
            to the Company;

            
            (vi)         
            to the extent not otherwise paid or provided, the Company shall timely
            pay or provide to Executive any other amounts or benefits required to be paid or
            provided or which Executive is eligible to receive following his termination of
            employment under any plan, program, policy, practice, contract or agreement of the
            Company and its affiliated companies; provided, however, that the benefits provided
            under this Section 6.5 shall be in lieu of, and not in addition to, any benefits for
            which Executive would be otherwise eligible including, without limitation, the
            severance benefits provided under Section 6.2.

            
            (b)          
            Section 409A of the Code. Notwithstanding anything to the contrary in this
            Agreement, any cash severance payments otherwise due to Executive pursuant to this
            Section 6.5 or otherwise on or within the three-month period following
            Executive’s termination will accrue during such three-month period and will
            become payable in a lump sum payment on the date three (3) months and one (1) day
            following the date of Executive’s termination, provided, that such cash severance
            payments will be paid earlier, at the times and on the terms set forth in the
            applicable provisions of Section 6.5, if the Company reasonably determines that the
            imposition of additional tax under Section 409A of the Internal Revenue Code of 1986,
            as amended, will not apply to an earlier payment of such cash severance payments. In
            all respects, the definition of “Change in Control” contained herein shall
            be interpreted and administered so as to comply with Section 409A of the Internal
            Revenue Code of 1986, as amended (the “Code”), and the provisions of United
            States Treasury (“Treasury”) Notice 2005-1, and any successor statute,
            regulation and guidance thereto. If the definition of Change in Control is inconsistent
            with any of the foregoing, the definition of Change in Control in Treasury Notice
            2005-1 and any successor Change in Control definition thereto shall be incorporated
            into this Agreement by reference. In the event the Treasury issues additional guidance
            which requires modification(s) to the definition of Change in Control to comply with
            the requirements of Section 409A of the Code and the Treasury guidance issued pursuant
            to the same or Section 409A of the Code is modified, the Executive and Company shall
            amend this Agreement by way of mutual agreement to comply with the same.

            
            (c)          
            Definition of Change in Control. Definition of Change in Control. For
            purposes of this Agreement, a “Change in Control” shall occur on the date
            that: (i) any “person” (as such term is used in Sections 13(d) and
            14(d) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial
            owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
            securities of the Company representing 50% or more of the total voting power of the
            capital

             

            
            5

             

            

            
            
            

            

             

            stock of Company;
            (ii) the approval by the stockholders of the sale or disposition by the Company of all
            or substantially all of the Company’s assets; and (iii) the approval by
            stockholders of the Company of a merger or consolidation of the Company with any other
            corporation, other than a merger or consolidation which would result in the voting
            securities of the Company outstanding immediately prior thereto continuing to represent
            (either by remaining outstanding or by being converted into voting securities of the
            surviving entity) more than fifty percent (50%) of the total voting power represented
            by the voting securities of the Company or such surviving entity outstanding
            immediately after such merger or consolidation; provided, however, that a Change of
            Control shall not be deemed to occur upon (i) the consummation of any private placement
            of the Company’s securities as part of the Company’s current or
            subsequently adopted capitalization plan, (ii) any reverse merger to which the Company
            is a party, or (iii) an IPO of the Company.

            
            (d)          
            As used herein, “Good Reason” means the occurrence, without
            Executive’s written consent, of any of the events or circumstances set forth in
            clauses (i) through (iv) below; provided, however, that Executive must first provide
            the Company with thirty (30) days’ written notice of the occurrence or existence
            of an event or circumstance specified below. Executive’s resignation will only be
            considered for Good Reason if, within thirty (30) days after the Company receives such
            notice, such event or circumstance has not been fully corrected and Executive has not
            been reasonably compensated for any losses or damages resulting therefrom (provided
            that such right of correction by the Company shall only apply to the first such notice
            given by Executive).

            
            (i)           
            the assignment to Executive of duties inconsistent in any material
            respect with Executive’s position (including status, offices, titles and
            reporting requirements), authority or responsibilities in effect immediately prior to
            such assignment; provided, however that a reduction in Executive’s title,
            authority or responsibilities following a Change in Control shall not constitute Good
            Reason unless there also occurs a reduction of Executive’s annual base salary;
            or

            
            (ii)          
            a reduction of more than 25% in Executive’s annual base salary or
            other compensation opportunities under annual or long-term compensation incentive plans
            as the same may be increased from time to time, provided that this clause (ii) shall
            not apply to any decrease in compensation opportunities under annual or long-term
            compensation incentive plans which applies generally to senior executives of the
            Company; or

            
            (iii)         
            a change by the Company in the location at which Executive performs
            Executive’s principal duties for the Company to a new location that is both (A)
            outside a radius of 90 miles from Executive’s principal residence immediately
            prior to the date on which such change occurs and (B) more than 90 miles from the
            location at which Executive performs his principal duties for the Company immediately
            prior to the date on which such change occurs; or

             

            
            6

             

            

            
            
            

            

             

             

            	
                        
                         

                    	
                        
                        (iv)

                    	
                        
                        Any material breach by the Company of this
                        Agreement.

                    
	
                        
                         

                    	
                        
                        6.5

                    	
                        
                        Limitation on Benefits.

                    	
                        
                         

                    
	
                    	
                    	
                    	
                    	
                    	
                    

            
            (a)          
            It is the intention of Executive and the Company that no payments made or benefits
            provided by the Company to or for the benefit of Executive under this Agreement or any
            other agreement or plan pursuant to which Executive is entitled to receive payments or
            benefits shall be non-deductible to the Company by reason of the operation of Section
            280G of the Internal Revenue Code of 1986, as amended (the “Code”),
            relating to golden parachute payments.

            
            (b)          
            The Company agrees that in the event any payments to Executive pursuant to this
            Agreement would result in a payment to Executive that would trigger any obligations or
            penalties under Section 4999 of the United States Internal Revenue Code (“Excise
            Tax”), if appropriate, the Company shall first submit to its stockholders for
            approval the transaction that may result in the imposition of the Excise Tax upon
            Executive in accordance with the regulations of the Internal Revenue Code governing
            shareholder approval of transactions giving rise to Excise Tax liability. Executive
            agrees that in connection with the submission to the Company’s stockholders that
            he will place a sufficient amount of such payments and benefits at risk such that if
            the Company’s stockholders do not approve such payments and benefits, he will no
            longer be entitled to receive such payments and benefits and he will return, to the
            extent necessary, any previously receive payments of benefits.

            
            (c)          
            Notwithstanding the foregoing, in the event that the severance and other
            benefits provided for in this Agreement or otherwise payable to Executive (i)
            constitute “parachute payments” within the meaning of Section 280G of the
            Code and (ii) but for this Section 6.6(c), would be subject to the excise tax imposed
            by Section 4999 of the Code, then Executive’s severance and other benefits will
            be either: (A) delivered in full, or (B) delivered as to such lesser extent which would
            result in no portion of such severance and other benefits being subject to excise tax
            under Section 4999 of the Code, whichever of the foregoing amounts, taking into account
            the applicable federal, state and local income taxes and the excise tax imposed by
            Section 4999, results in the receipt by Executive on an after-tax basis, of the
            greatest amount of severance and other benefits, notwithstanding that all or some
            portion of such severance and other benefits may be taxable under Section 4999 of the
            Code. Unless the Company and Executive otherwise agree in writing, any determination
            required under this Section 6.6(c) will be made in writing by the Company’s
            independent public accountants immediately prior to Change in Control (the
            “Accountants”), whose determination will be conclusive and binding
            upon Executive and the Company for all purposes. For purposes of making the
            calculations required by this Section 6.6(c), the Accountants may make reasonable
            assumptions and approximations concerning applicable taxes and may rely on reasonable,
            good faith interpretations concerning the application of Sections 280G and 4999 of the
            Code. The Company and Executive will furnish to the Accountants such information and
            documents as the Accountants may reasonably request in order to make a determination
            under this Section. The Company will bear all costs the Accountants may reasonably
            incur in connection with any calculations contemplated by this Section 6.6(c). In the
            event the Accountants determine that this Section 6.6(c) requires a reduction in
            Executive’s severance or other benefits, Executive will

             

            
            7

             

            

            
            
            

            

             

            be provided the
            reasonable opportunity to determine the order in which severance and other benefits
            will be reduced. If Executive fails to make an appropriate reduction election within
            the reasonable time period determined by the Board or its committee, in its sole
            discretion, the order of reduction will be determined by the Board or its
            committee.

            
            7.            
            Confidentiality Agreement. As a condition of employment, Executive agrees to
            sign and comply with the terms of the Company’s Employee Confidential Information
            and Invention Assignment Agreement (“Confidentiality Agreement”), a copy of
            which is attached hereto as Exhibit “A”.

            
            8.            
            Conflicting Obligations. Executive certifies that Executive has no outstanding
            agreement or obligation that is in conflict with any of the provisions of this
            Agreement or the Confidentiality Agreement or that would preclude Executive from
            complying with the provisions of this Agreement or the Confidentiality Agreement.
            Executive will not enter into any such conflicting agreement during the Employment
            Period.

            
            9.            
            Insurance and Indemnification. The Company shall ensure that Executive is added
            to any officers and directors insurance policy obtained by the Company, under which
            Executive shall receive usual and customary coverage for all acts undertaken as an
            officer and director of the Company. In addition, the Company shall indemnify Executive
            to the fullest extent permitted by law for all costs, damages, fees or other expenses
            that Executive incurs or potentially may incur in connection with his duties
            herewith.

            
            10.          
            Pronouns. Whenever the context may require, any pronouns used in this Agreement
            shall include the corresponding masculine, feminine or neuter forms, and the singular
            forms of nouns and pronouns shall include the plural, and vice versa.

            
            11.          
            Entire Agreement. This Agreement, constitutes the entire agreement between the
            parties and supersede all prior agreements and understandings, whether written or oral,
            relating to the subject matter of this Agreement with the exception of the
            Confidentiality Agreement, and any rights and obligations set forth in any agreements
            governing Executive’s stock or stock options, including the Company’s stock
            option plan.

            
            12.          
            Amendment. This Agreement may be amended or modified only by a written
            instrument executed by both the Company and Executive.

            
            13.          
            Governing Law. This Agreement shall be construed, interpreted and enforced in
            accordance with the laws of the State of Utah.

            
            14.          
            Notices. Any notice or other communication required or permitted by this
            Agreement to be given to a party shall be in writing and shall be deemed given if
            delivered personally or by commercial messenger or courier service, or mailed by U.S.
            registered or certified mail (return receipt requested), or sent via facsimile (with
            receipt of confirmation of complete transmission) to the party at the party’s
            address or facsimile number written below or at such other address or facsimile number
            as the party may have previously specified by like notice.

             

            
            8

             

            

            
            
            

            

             

            If by mail,
            delivery shall be deemed effective 3 business days after mailing in accordance with
            this Section 14.

             

            	
                        
                         

                    	
                        
                        If to the Company, to:

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        BIO-PATH, INC.

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        3323 Harrison Blvd., Suite 203

                    
	
                        
                         

                    	
                        
                        Ogden, UT 84403

                    	
                        
                         

                    
	
                    	
                    	
                    	
                    	
                    

             

            	
                        
                         

                    	
                        
                        Attn.: Douglas P. Morris,

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        If to Executive, to the last address of Executive provided
                        by Executive to the

                    
	
                        
                         

                    	
                        
                        Company.

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        15.

                    	
                        
                        Successors and Assigns.

                    	
                        
                         

                    
	
                    	
                    	
                    	
                    	
                    	
                    

            
            15.1        Assumption by
            Successors. In the event of any Change in Control, any successor shall succeed to
            all of the Company’s duties, obligations, rights and benefits hereunder. The
            Company shall require any successor (whether direct or indirect, by purchase, merger,
            consolidation or otherwise and whether or not after a Change in Control) to all or
            substantially all of the business or assets of the Company to assume in writing prior
            to such succession and to agree to perform its obligations under this Agreement in the
            same manner and to the same extent that the Company would be required to perform it if
            no such succession had taken place.

            
            15.2        Successor
            Benefits. This Agreement shall be binding upon and inure to the benefit of both
            parties and their respective successors and assigns, including any corporation into
            which the Company may be merged or which may succeed to its assets or business;
            provided, however, that the obligations of Executive are personal and
            shall not be assigned by him.

            	
                        
                         

                    	
                        
                        16.

                    	
                        
                        Miscellaneous.

                    

            
            16.1        No Waiver.
            No delay or omission by the Company in exercising any right under this Agreement shall
            operate as a waiver of that or any other right. A waiver or consent given by the
            Company on any one occasion shall be effective only in that instance and shall not be
            construed as a bar or waiver of any right on any other occasion.

            
            16.2        Captions.
            The captions of the sections of this Agreement are for convenience of reference only
            and in no way define, limit or affect the scope or substance of any section of this
            Agreement.

            
            16.3       
            Severability. In case any provision of this Agreement shall be invalid, illegal
            or otherwise unenforceable, the validity, legality and enforceability of the remaining
            provisions shall in no way be affected or impaired thereby.

             

            
            9

             

            

            
            
            

            

             

             

            
            16.4       
            Counterparts. This Agreement may be executed in two or more counterparts, each
            of which shall be deemed an original but all of which together shall constitute one and
            the same instrument.

            
             

            
            IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
            of the day and year set forth above.

            
             

            	
                        
                         

                    	
                        
                        EXECUTIVE

                        
                         

                        
                        _______________________

                        
                        Douglas P. Morris

                    

            	
                        
                         

                    	
                        
                         

                        
                        Bio-Path, Inc.

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        By: _________________________

                    
	
                        
                         

                    	
                        
                        Its: Chief Executive Officer

                    	
                        
                         

                    
	
                    	
                    	
                    	
                    	
                    

             

             

             

             

             

            
            F:\BUD\Biopath\Doug EmploymentAgreement.doc

             

            
            10BIO-PATH HOLDINGS, INC.

            
            2007 Stock Incentive Plan

             

            
            1.  
            PURPOSE. The purpose of the Bio-Path
            Holdings, Inc. (“The Company”) 2007 Stock Incentive Plan (the
            “Plan”) is to provide a means through which the Company and its
            Subsidiaries may attract able persons to enter and remain in the employ of the Company
            and its Subsidiaries and to provide a means whereby eligible persons can acquire and
            maintain Common Stock ownership, or be paid incentive compensation measured by
            reference to the value of Common Stock, thereby strengthening their commitment to the
            welfare of the Company and its Subsidiaries and promoting an identity of interest
            between Shareholders and these eligible persons.

            
             

            
            So that the appropriate incentive can be provided, the Plan provides for
            granting Incentive Stock Options, Nonqualified Stock Options, Restricted Stock Awards,
            Restricted Stock Unit Awards, Performance Awards and other stock-based awards, or any
            combination of the foregoing. Capitalized terms not defined in the text are defined in
            Section 24.

             

            
            2.  
            SHARES SUBJECT TO THE PLAN.

             

            
            2.1  Number of
            Shares. Subject to Section 18, the total number of Shares
            reserved and available for grant and issuance pursuant to this Plan will be
            7,000,000 Shares, subject to the automatic Share increase described in Section 2.2
            below. Of the total Shares reserved for issuance under the Plan, no more than 
            4,500,000 shares of Common Stock may be issued under the Plan as Awards under Sections
            6 (Restricted Stock) and 7 (Performance and Other Stock-Based Awards) of the Plan,
            subject to the automatic Share increase described in Section 2.3 below.

            
             

            
            Shares that have been (a) reserved for issuance under options that have
            expired or otherwise terminated without issuance of the underlying Shares, (b) reserved
            for issuance or issued under an Award granted hereunder but are forfeited or are
            repurchased by the Company at the original issue price, or (c) reserved for issuance or
            issued under an Award that otherwise terminates without Shares being issued, shall be
            available for issuance. In the event of the exercise of SARs, whether or not granted in
            tandem with options, only the number of shares of Common Stock actually issued in
            payment of such SARs shall be charged against the number of shares of Common Stock
            available for the grant of Awards hereunder, and any Common Stock subject to tandem
            options, or portions thereof, which have been surrendered in connection with any such
            exercise of SARs shall not be charged against the number of shares of Common Stock
            available for the grant of Awards hereunder. At all times the Company shall reserve and
            keep available a sufficient number of Shares as shall be required to satisfy the
            requirements of all outstanding options granted under this Plan and all other
            outstanding but unvested Awards granted under this Plan. The Shares to be offered under
            the Plan shall be authorized and unissued Common Stock, or issued Common Stock that
            shall have been reacquired by the Company. Subject to adjustment in accordance with
            Section 18.4, in any calendar year, no Participant shall be granted Awards in respect
            of more than 500,000 shares of Common Stock (whether through grants of options or
            SARs or other Awards of Common Stock or rights with respect thereto).

            
             

            
            2.2  Annual
            Increases. The number of Shares of Common Stock available for
            issuance under the Plan shall automatically increase on the first trading day of
            January of each year, beginning with January in year 2009 and continuing through
            January in year 2017, by a number of Shares equal to ten percent (10.0%) of the total
            number of Shares of Common Stock outstanding on the last trading day in the immediately
            preceding December.

            
             

             

            

            
            
            

            

             

             

            
            2.3  Award
            Limitation. The number of Shares of Common Stock that may be
            issued under the Plan as Awards under Sections 6 (Restricted Stock) and 7 (Performance
            and Other Stock-Based Awards) of the Plan shall automatically increase on the first
            trading day of January of each year, beginning with January in year 2009 and continuing
            through January in year 2017, by a number of Shares equal to sixty-four percent (64%)
            of the total number of Shares increased pursuant to Section 2.2.

             

            
            3.  
            ELIGIBILITY. ISOs (as defined in Section 5
            below) may be granted only to employees (including officers and directors who are also
            employees) of the Company or of a Subsidiary of the Company. All other Awards may be
            granted to employees, officers, directors, consultants, independent contractors and
            advisors of the Company or Subsidiary of the Company.

            
             

            
            4.  
            ADMINISTRATION.

             

            
            4.1
                    Committee
            Authority. This Plan will be administered by the Committee.
            Any power, authority or discretion granted to the Committee may also be taken by the
            Board. Subject to the general purposes, terms and conditions of this Plan, and to the
            direction of the Board, the Committee will have full power to implement and carry out
            this Plan. Without limitation, the Committee will have the authority to:

            
             

            
            (a)  select persons to receive Awards;

            
             

            
            (b)  determine the nature, extent, form and terms of Awards
            and the number of Shares or other consideration subject to Awards, including whether
            any particular Award shall be settled in cash or in stock;

            
             

            
            (c)  determine the vesting, exerciseability and payment of
            Awards;

            
             

            
            (d)  correct any defect, supply any omission or reconcile any
            inconsistency in this Plan, any Award or any Award Agreement;

            
             

            
            (e)  determine whether Awards will be granted singly, in
            combination with, in tandem with, in replacement of, or as alternatives to, other
            Awards under this Plan or any other incentive or compensation plan of the Company or
            any Subsidiary of the Company;

            
             

            
            (f)  prescribe, amend and rescind rules and regulations
            relating to this Plan or any Award;

            
             

            
            (g)  make all factual determinations with respect to, and
            otherwise construe and interpret, this Plan, any Award Agreement and any other
            agreement or document executed pursuant to this Plan;

            
             

            
            (h)  grant waivers of Plan or Award conditions;

            
             

            
            (i)  determine whether an Award has been earned;

            
             

            
            (j)  accelerate the vesting of any Award; and

            
             

            
            (k)  make all other determinations necessary or advisable for
            the administration of this Plan.

            
             

             

            
            2

             

            

            
            
            

            

             

             

            
            The Committee’s interpretation of the Plan or any documents
            evidencing Awards granted pursuant thereto and all decisions and determinations by the
            Committee with respect to the Plan shall be final, binding, and conclusive on all
            parties unless otherwise determined by the Board.

             

            
            4.2
                     Committee
            Discretion; Board Power. Any determination made by the
            Committee with respect to any Award will be made in its sole discretion at the time of
            grant of the Award or, unless in contravention of any express term of this Plan or
            Award, at any later time, and such determination will be final and binding on the
            Company and on all persons having an interest in any Award under this Plan. The
            Committee may delegate such of its powers and authority under the Plan as it deems
            appropriate to designated officers or employees of the Company. In addition, the full
            Board may exercise any of the powers and authority of the Committee under the Plan. In
            the event of such delegation of authority or exercise of authority by the Board,
            references in the Plan to the Committee shall be deemed to refer, as appropriate, to
            the delegate of the Committee or the Board. Actions taken by the Committee and any
            delegation by the Committee to designated officers or employees shall comply with
            Section 16(b) of the Exchange Act, the performance-based provisions of Section 162(m)
            of the Code, and the regulations promulgated under each of such statutory provisions,
            or the respective successors to such statutory provisions or regulations, as in effect
            from time to time, to the extent applicable. Notwithstanding any other provision of the
            Plan, if the Committee deems it to be in the best interest of the Company, the
            Committee retains the discretion to make such Awards under the Plan that may not comply
            with the requirements of Section 16(b) of the Exchange Act, Section 162(m) of the Code,
            or any other relevant statute or regulation.

             

            
            5.
                      STOCK
            OPTIONS. The Committee may grant Options to eligible persons
            and will determine whether such options will be intended to be “Incentive Stock
            Options” within the meaning of Section 422 of the Code or any successor section
            thereof (“ISOs”) or nonqualified stock options (options not intended to
            qualify as incentive stock options) (“NQSOs”), the number of Shares subject
            to the Option, the Exercise Price of the option, the period during which the option may
            be exercised, and all other terms and conditions of the Option, subject to the
            following:

            
             

            
            5.1
                     Form of Option
            Grant. Each Option granted under this Plan will be evidenced
            by an Award Agreement (“Stock Option Agreement”), which will expressly
            identify the Option as an ISO or NQSO, and will be in such form and contain such
            provisions (which need not be the same for each Participant) as the Committee may from
            time to time approve, and which will comply with and be subject to the terms and
            conditions of this Plan.

            
             

            
            5.2
                     Exercise
            Period. Options may be exercisable to the extent vested
            within the times or upon the events determined by the Committee as set forth in the
            Stock Option Agreement governing such option; provided, however, that no option will be
            exercisable after the expiration of ten (10) years from the date the option is granted;
            and provided further that no ISO granted to a person who directly or by attribution
            owns more than ten percent (10%) of the total combined voting power of all classes of
            stock of the Company or of any Subsidiary of the Company (“Ten Percent
            Shareholder”) will be exercisable after the expiration of five (5) years from the
            date the ISO is granted. The Committee also may provide for options to become
            exercisable at one time or from time to time, periodically or otherwise, in such number
            of Shares or percentage of Shares as the Committee determines.

            
             

            
            5.3
                    Exercise
            Price. The Exercise Price of an option will be determined by
            the Committee when the option is granted and must equal or exceed Fair Market Value of
            the Shares on the date of grant; provided that: the Exercise Price of any ISO granted
            to a Ten Percent Shareholder will not be less than 110% of the Fair Market Value of the
            Shares on the date of grant. In addition, the Exercise Price may (i) be subject to a
            limit on the economic value that may be realized by a Participant from an option or
            SAR, or otherwise (ii) vary from the original purchase price, provided that such
            variable

             

            
            3

             

            

            
            
            

            

             

            
            purchase price can never be less than the Fair Market Value of the
            shares of Common Stock subject to such option or SAR, determined as of the date of
            grant. 

            
             

            
            5.4
                    Date of
            Grant. The date of grant of an Option will be the date on
            which the Committee makes the determination to grant such option, unless otherwise
            specified by the Committee. The Stock Option Agreement and a copy of this Plan will be
            delivered to the Participant within a reasonable time after the granting of the
            Option.

            
             

            
            5.5
                     Method of
            Exercise. Options may be exercised by delivery to the Company
            of a written stock option exercise agreement (the “Exercise Agreement”) in
            a form approved from time to time by the Committee (which need not be the same for each
            Participant), stating the number of Shares being purchased, the restrictions imposed on
            the Shares purchased under such Exercise Agreement, if any, and such representations
            and agreements regarding Participant’s investment intent and access to
            information and other matters, if any, as may be required or desirable by the Company
            to comply with applicable securities laws, together with payment in full of the
            Exercise Price for the number of Shares being purchased. Payment for the Shares
            purchased may be made in accordance with Section 8 of this Plan.

            
             

            
            5.6
                    Termination
            . Unless otherwise expressly provided in an Award Agreement or otherwise determined by
            the Committee, exercise of an option will always be subject to the
            following:

            
             

            
            a.  If the Participant is Terminated for any reason (including
            voluntary Termination) other than death or Disability or for Cause, then the
            Participant may exercise such Participant’s Options only to the extent that such
            options have vested in accordance with the applicable Award Agreement and would have
            been exercisable upon the Termination Date no later than three (3) months after the
            Termination Date (or such shorter or longer time period not exceeding five (5) years as
            may be determined by the Committee, with any exercise beyond three (3) months after the
            Termination Date deemed to be a NQSO), but in any event, no later than the expiration
            date of the Options.

            
             

            
            b.  If the Participant is Terminated because of
            Participant’s death or Disability (or the Participant dies within three (3)
            months after a Termination other than for Cause or because of Participant’s
            Disability), then Participant’s Options may be exercised only to the extent that
            such options have vested in accordance with the applicable Award Agreement and would
            have been exercisable by Participant on the Termination Date and must be exercised by
            Participant (or Participant’s legal representative or authorized assignee) no
            later than twelve (12) months after the Termination Date (or such shorter or longer
            time period not exceeding five (5) years as may be determined by the Committee, with
            any such exercise beyond twelve (12) months after the Termination Date when the
            Termination is for Participant’s death or Disability, deemed to be a NQSO), but
            in any event no later than the expiration date of the Options.

            
             

            
            c.  If a Participant is terminated for Cause, neither the
            Participant, the Participant’s estate nor such other person who may then hold the
            Option shall be entitled to exercise any option with respect to any Shares whatsoever,
            after termination of service, whether or not after termination of service the
            Participant may receive payment from the Company or Subsidiary for vacation pay, for
            services rendered prior to termination, for services rendered for the day on which
            termination occurs, for salary in lieu of notice, or for any other benefits. For the
            purpose of this paragraph, termination of service shall be deemed to occur on the date
            when the Company dispatches notice or advice to the Participant that such Participant's
            service is terminated.

             

            
            d.  If the Participant is not an employee or a director, the
            Award Agreement shall specify treatment of the Award upon Termination.

             

             

            
            4

             

            

            
            
            

            

             

             

            
            5.7
                     Limitations on
            ISO. The aggregate Fair Market Value (determined as of the
            date of grant) of Shares with respect to which ISOs are exercisable for the first time
            by a Participant during any calendar year (under this Plan or under any other
            incentive stock option plan of the Company or Subsidiary of the Company) will not
            exceed $100,000 or such other amount as may be required by the Code. If the Fair Market
            Value of Shares on the date of grant with respect to which ISOs are exercisable for the
            first time by a Participant during any calendar year exceeds $100,000, then the Options
            for the first $100,000 worth of Shares to become exercisable in such calendar year will
            be ISOs and the Options for the amount in excess of $100,000 that become exercisable in
            that calendar year will be NQSOs. In the event that the Code or the regulations
            promulgated thereunder are amended after the Effective Date of this Plan to provide for
            a different limit on the Fair Market Value of Shares permitted to be subject to ISOs,
            such different limit will be automatically incorporated herein and will apply to any
            Options granted after the effective date of such amendment.

            
             

            
            5.8
                    Modification,
            Extension or Renewal. The Committee may modify, extend or
            renew outstanding Options and authorize the grant of new Options in substitution
            therefor, provided that, except as expressly provided for in the Plan or an Award
            Agreement, any such action may not, without the written consent of a Participant, (i)
            impair any of such Participant’s rights under any option previously granted and
            (ii) except as provided for in Section 18 of the Plan, options issued hereunder will
            not be repriced, replaced or regranted through cancellation or by lowering the Exercise
            Price of a previously granted Award without prior approval of the Company’s
            Shareholders. Any outstanding ISO that is modified, extended, renewed or otherwise
            altered will be treated in accordance with Section 424(h) of the Code.

            
             

            
            5.9
                    Limitations on
            Exercise. The Committee may specify a reasonable minimum
            number of Shares that may be purchased on any exercise of an option, provided that such
            minimum number will not prevent Participant from exercising the option for the full
            number of Shares for which it is then exercisable.

            
             

            
            5.10
                   No
            Disqualification. Notwithstanding any other provision in this
            Plan, no term of this Plan relating to ISOs will be interpreted, amended or altered,
            nor will any discretion or authority granted under this Plan be exercised, so as to
            disqualify this Plan under Section 422 of the Code or, without the consent of the
            Participant affected, to disqualify any ISO under Section 422 of the Code.

            
             

            
            5.11      Lapsed
            Grants. Notwithstanding anything in the Plan to the contrary,
            the Company may, in its sole discretion, allow the exercise of a lapsed grant if the
            Company determines that: (i) the lapse was solely the result of the Company’s
            inability to timely execute the exercise of an option award prior to its lapse, and
            (ii) the Participant made valid and reasonable efforts to exercise the Award. In the
            event the Company makes such a determination, the Company shall allow the exercise to
            occur as promptly as possible following its receipt of exercise instructions subsequent
            to such determination.

            
             

            
            5.12
                   Stock Appreciation Rights
            (SARs). In addition to the grant of options, as set forth
            above, the Committee may also grant SARs to any person eligible to be a Participant,
            which grant shall consist of a right that is the economic equivalent, and in all other
            regards is identical to a stock option that is permitted to be granted under the Plan,
            except that on the exercise of such SAR, the Participant shall receive shares of Common
            Stock having a Fair Market Value that is equal to the Fair Market Value of the shares
            of Common Stock that would be subject to such an option, reduced by the amount that
            would be required to be paid by the Participant as the purchase price on exercise of
            such option. A grant of a SAR shall be documented by means of an Award Agreement (a
            “SAR Agreement”) containing the relevant terms and conditions of such
            grant. The Exercise Price for a SAR shall be subject to the same requirements as
            Options under Section 5.3, and no SAR may be exercisable after the expiration of ten
            (10) years from the date the SAR is granted. For purposes of the limitation on the
            number of shares of

             

            
            5

             

            

            
            
            

            

             

            
            Common Stock that may be subject to Stock Options granted to any
            employee during any one calendar year, and for purposes of the aggregate limitation on
            the number of shares of Common Stock that may be subject to grants under the Plan, SARs
            shall be treated in the same manner as options would be treated.

             

            	
                        
                         

                    	
                        
                        6.

                    	
                        
                        RESTRICTED STOCK.

                    

             

            
            6.1.  Restricted Stock
            Awards. The Committee may grant to any Participant an Award
            of Common Stock in such number of shares, and on such terms, conditions and
            restrictions, whether based on performance standards, periods of service, retention by
            the Participant of ownership of purchased or designated shares of Common Stock or other
            criteria, as the Committee shall establish. If the Committee determines to make
            performance-based Awards of restricted Shares under this Section 6 to “covered
            employees” (as defined in Section 162(m) of the Code), performance targets will
            be limited to specified levels of one or more of the Performance Factors specified in
            the definition set forth in Section 24. The terms of any Restricted Stock Award granted
            under this Plan shall be set forth in an Award Agreement which shall contain provisions
            determined by the Committee and not inconsistent with this Plan.

            
             

            
            6.2  Issuance of Restricted
            Shares. As soon as practicable after the Date of Grant of a
            Restricted Stock Award by the Committee, the Company shall cause to be transferred on
            the books of the Company, or its agent, Common Stock, registered on behalf of the
            Participant, evidencing the restricted Shares covered by the Award, but subject to
            forfeiture to the Company as of the Date of Grant if an Award Agreement with respect to
            the Restricted Shares covered by the Award is not duly executed by the Participant and
            timely returned to the Company. All Common Stock covered by Awards under this Section 6
            shall be subject to the restrictions, terms and conditions contained in the Plan and
            the Award Agreement entered into by the Participant. Until the lapse or release of all
            restrictions applicable to an Award of restricted Shares, the share certificates
            representing such restricted Shares may be held in custody by the Company, its
            designee, or, if the certificates bear a restrictive legend, by the Participant. Upon
            the lapse or release of all restrictions with respect to an Award as described in
            Section 6.5, one or more share certificates, registered in the name of the Participant,
            for an appropriate number of shares as provided in Section 6.5, free of any
            restrictions set forth in the Plan and the Award Agreement shall be delivered to the
            Participant.

            
             

            
            6.3  Shareholder
            Rights. Beginning on the Date of Grant of the Restricted
            Stock Award and subject to execution of the Award Agreement as provided in Section 6.2,
            the Participant shall become a shareholder of the Company with respect to all shares
            subject to the Award Agreement and shall have all of the rights of a shareholder,
            including, but not limited to, the right to vote such shares and the right to receive
            dividends; provided, however, that any Common Stock distributed as a dividend or
            otherwise with respect to any restricted Shares as to which the restrictions have not
            yet lapsed, shall be subject to the same restrictions as such restricted Shares and
            held or restricted as provided in Section 6.2.

            
             

            
            6.4  Restriction on
            Transferability. None of the restricted Shares may be
            assigned or transferred (other than by will or the laws of descent and distribution, or
            to an inter vivos trust with respect to which the Participant is treated as the owner
            under Sections 671 through 677 of the Code, except to the extent that Section 16 of the
            Exchange Act limits a Participant's right to make such transfers), pledged or sold
            prior to lapse of the restrictions applicable thereto.

            
             

            
            6.5  Delivery of Shares Upon
            Vesting. Upon expiration or earlier termination of the
            forfeiture period without a forfeiture and the satisfaction of or release from any
            other conditions prescribed by the Committee, or at such earlier time as provided under
            the provisions of Section 6.7, the restrictions applicable to the restricted Shares
            shall lapse. As promptly as administratively feasible thereafter, the Company shall
            deliver to the Participant or, in case of the Participant's death, to the

             

            
            6

            
            

            

             

             

            

            

             

            
            Participant's Beneficiary, one or more share certificates for the
            appropriate number of shares of Common Stock, free of all such restrictions, except for
            any restrictions that may be imposed by law.

            
             

            
            6.6  Forfeiture of Restricted
            Shares. Subject to Sections 6.7, all restricted Shares shall
            be forfeited and returned to the Company and all rights of the Participant with respect
            to such restricted Shares shall terminate unless the Participant continues in the
            service of the Company or a Subsidiary as an employee until the expiration of the
            forfeiture period for such restricted Shares and satisfies any and all other conditions
            set forth in the Award Agreement. The Committee shall determine the forfeiture period
            (which may, but need not, lapse in installments) and any other terms and conditions
            applicable with respect to any Restricted Stock Award.

            
             

            
            6.7  Waiver of Forfeiture
            Period. Notwithstanding anything contained in this Section 6
            to the contrary, the Committee may, in its sole discretion, waive the forfeiture period
            and any other conditions set forth in any Award Agreement under appropriate
            circumstances (including the death, Disability or retirement of the Participant or a
            material change in circumstances arising after the date of an Award) and subject to
            such terms and conditions (including forfeiture of a proportionate number of the
            restricted Shares) as the Committee shall deem appropriate.

            
             

            
            6.8  Restricted Stock Unit
            Awards. Without limiting the generality of the foregoing
            provisions of this Section 6, and subject to such terms, limitations and restrictions
            as the Committee may impose, Participants designated by the Committee may receive
            Awards of Restricted Stock Units representing the right to receive shares of Common
            Stock in the future subject to the achievement of one or more goals relating to the
            completion of service by the Participant and/or the achievement of performance or other
            objectives. If the Committee determines to make performance-based Awards of Restricted
            Stock Units under this Section 6.8 to “covered employees” (as defined in
            Section 162(m) of the Code), performance targets will be limited to specified levels of
            one or more of the Performance Factors specified in the definition set forth in Section
            24. Restricted Stock Unit Awards shall be subject to the restrictions, terms and
            conditions contained in the Plan and the applicable Award Agreements entered into by
            the appropriate Participants. Until the lapse or release of all restrictions applicable
            to an Award of Restricted Stock Units, no shares of Common Stock shall be issued in
            respect of such Awards and no Participant shall have any rights as a Shareholder of the
            Company with respect to the shares of Common Stock covered by such Restricted Stock
            Unit Award. Upon the lapse or release of all restrictions with respect to a Restricted
            Stock Unit Award or at a later date if distribution has been deferred, one or more
            share certificates, registered in the name of the Participant, for an appropriate
            number of shares, free of any restrictions set forth in the Plan and the related Award
            Agreement shall be delivered to the Participant. A Participant’s Restricted Stock
            Unit Award shall not be contingent on any payment by or consideration from the
            Participant other than the rendering of services. Notwithstanding anything contained in
            this Section 6.8 to the contrary, the Committee may, in its sole discretion, waive the
            forfeiture period and any other conditions set forth in any Award Agreement under
            appropriate circumstances (including the death, Disability or retirement of the
            Participant) and subject to such terms and conditions (including forfeiture of a
            proportionate number of the Restricted Stock Units) as the Committee shall deem
            appropriate.

            
             

            	
                        
                         

                    	
                        
                        7.

                    	
                        
                        PERFORMANCE AND OTHER STOCK-BASED
                        AWARDS.

                    

            
             

            
            7.1  Performance
            Awards.

             

            
            (a)  Award Periods and Calculations of
            Potential Incentive Amounts. The Committee may grant
            Performance Awards to Participants. A Performance Award shall consist of the right to
            receive a payment (measured by the Fair Market Value of a specified number of shares of
            Common Stock, increases in such Fair Market Value during the Performance Period and/or
            a fixed cash

             

            
            7

             

            
            

            

             

             

            

            

             

            
            amount) contingent upon the extent to which certain predetermined
            performance targets have been met during a Performance Period. The Committee, in its
            discretion and under such terms as it deems appropriate, may permit newly eligible
            Participants, such as those who are promoted or newly hired, to receive Performance
            Awards after a Performance Period has commenced.

            
             

            
            (b)  Performance
            Targets. The performance targets may include such goals
            related to the performance of the Company or, where relevant, any one or more of its
            Subsidiaries or divisions and/or the performance of a Participant as may be established
            by the Committee in its discretion. In the case of Performance Awards to “covered
            employees” (as defined in Section 162(m) of the Code), the targets will be
            limited to specified levels of one or more of the Performance Factors specified in the
            definition set forth in Section 24. The performance targets established by the
            Committee may vary for different Performance Periods and need not be the same for each
            Participant receiving a Performance Award in a Performance Period. Except to the extent
            inconsistent with the performance-based compensation exception under Section 162(m) of
            the Code, in the case of Performance Awards granted to employees to whom such section
            is applicable, the Committee, in its discretion, but only under extraordinary
            circumstances as determined by the Committee, may change any prior determination of
            performance targets for any Performance Period at any time prior to the final
            determination of the Award when events or transactions occur to cause the performance
            targets to be an inappropriate measure of achievement.

            
             

            
            (c)  Earning Performance
            Awards. The Committee, at or as soon as practicable after the
            Date of Grant, shall prescribe a formula to determine the percentage of the Performance
            Award to be earned based upon the degree of attainment of the applicable performance
            targets.

            
             

            
            (d)  Payment of Earned Performance
            Awards. Payments of earned Performance Awards shall be made
            in cash, Common Stock or Stock Units, or a combination of cash, Common Stock and Stock
            Units, in the discretion of the Committee. The Committee, in its sole discretion, may
            define, and set forth in the applicable Award Agreement, such terms and conditions with
            respect to the payment of earned Performance Awards as it may deem
            desirable.

            
             

            
            (e)  Termination of
            Service. In the event of a Participant’s Termination
            during a Performance Period, the Participant’s Performance Awards shall be
            forfeited except as may otherwise be provided in the applicable Award
            Agreement.

             

            
            7.2.  Grant of Other Stock-Based
            Awards. Other stock-based awards, consisting of stock
            purchase rights (with or without loans to Participants by the Company containing such
            terms as the Committee shall determine), Awards of Common Stock, or Awards valued in
            whole or in part by reference to, or otherwise based on, Common Stock, may be granted
            either alone or in addition to or in conjunction with other Awards under the Plan.
            Subject to the provisions of the Plan, the Committee shall have sole and complete
            authority to determine the persons to whom and the time or times at which such Awards
            shall be made, the number of shares of Common Stock to be granted pursuant to such
            Awards, and all other conditions of the Awards. Any such Award shall be confirmed by an
            Award Agreement executed by the Committee and the Participant, which Award Agreement
            shall contain such provisions as the Committee determines to be necessary or
            appropriate to carry out the intent of this Plan with respect to such Award.

             

            
            7.3.  Terms of Other Stock-Based
            Awards. In addition to the terms and conditions specified in
            the Award Agreement, Awards made pursuant to Section 7.2 shall be subject to the
            following:

             

             

            
            8

             

            
            

            

             

            

            

             

             

            
            (a) Any Common Stock subject to Awards made under Section 7.2 may
            not be sold, assigned, transferred, pledged or otherwise encumbered prior to the date
            on which the shares are issued, or, if later, the date on which any applicable
            restriction, performance or deferral period lapses; and

            
             

            
            (b) If specified by the Committee in the Award Agreement, the
            recipient of an Award under Section 7.2 shall be entitled to receive, currently or on a
            deferred basis, interest or dividends or dividend equivalents with respect to the
            Common Stock or other securities covered by the Award; and

            
             

            
            (c) The Award Agreement with respect to any Award shall contain
            provisions dealing with the disposition of such Award in the event of the
            Participant’s Termination prior to the exercise, realization or payment of such
            Award, whether such termination occurs because of retirement, Disability, death or
            other reason, with such provisions to take account of the specific nature and purpose
            of the Award.

             

            	
                        
                         

                    	
                        
                        8.

                    	
                        
                        PAYMENT FOR SHARE
                        PURCHASES.

                    

             

            
            8.1
                     Payment
            . Payment for Shares purchased pursuant to this Plan may be made in cash (by check) or,
            where expressly approved for the Participant by the Committee or where expressly
            indicated in the Participant’s Award Agreement and where permitted by
            law:

            
             

            	
                        
                         

                    	
                        
                        (a)

                    	
                        
                        by cancellation of indebtedness of the Company to the
                        Participant;

                    

            
             

            
            (b)
                     by surrender of
            shares (or by delivering a certification or attestation of ownership of such shares)
            that either: (1) have been owned by Participant for any period required by the Company
            and have been paid for within the meaning of SEC Rule 144 (and, if such shares were
            purchased from the Company by use of a promissory note, such note has been fully paid
            with respect to such shares); or (2) were obtained by Participant in the public
            market;

            
             

            
            (c)
                     by tender of a
            promissory note having such terms as may be approved by the Committee and bearing
            interest at a rate sufficient to avoid imputation of income under the Code;

            
             

            
            (d)
                     by waiver of
            compensation due or accrued to the Participant for services rendered;

            
             

            
            (e)
                     with respect only
            to purchases upon exercise of an option, and provided that a public market for the
            Company’s stock exists:

             

            
            (1)  through a “same day sale” commitment from the
            Participant and a broker-dealer that is a member of the National Association of
            Securities Dealers (an “NASD Dealer”) whereby the Participant irrevocably
            elects to exercise the option and to sell a portion of the Shares so purchased to pay
            for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
            such Shares to forward the Exercise Price directly to the Company; or

            
             

            
            (2)  through a “margin” commitment from the
            Participant and a NASD Dealer whereby the Participant irrevocably elects to exercise
            the option and to pledge the Shares so purchased to the NASD Dealer in a margin account
            as security for a loan from the NASD Dealer in the amount of the Exercise Price, and
            whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
            Exercise Price directly to the Company; or

             

             

            
            9

             

            
            

            

             

            

            

             

             

            
            (f)
                     by any combination
            of the foregoing or other methods authorized by the Committee.

             

            
            At its discretion, the Committee may modify or suspend any method for
            the exercise of stock options, including any of the methods specified in the previous
            sentence. Delivery of shares for exercising an Option shall be made either through the
            physical delivery of shares or through an appropriate certification or attestation of
            valid ownership.

             

            
            8.2
                     Loan
            Guarantees. Except as prohibited by law or regulation, the
            Committee may authorize a guarantee by the Company of a third-party loan to the
            Participant for the purpose of purchasing Shares awarded under this Plan.

             

            	
                        
                         

                    	
                        
                        9. 

                    	
                        
                        WITHHOLDING TAXES

                    

             

            
            9.1
                    Withholding
            Generally. Whenever Shares are to be issued in satisfaction
            of Awards granted under this Plan, the Company may require the Participant to remit to
            the Company an amount sufficient to satisfy federal, state and local withholding tax
            requirements prior to the delivery of any certificate or certificates for such Shares.
            Whenever, under this Plan, payments in satisfaction of Awards are to be made in cash,
            such payment will be net of an amount sufficient to satisfy federal, state, and local
            withholding tax requirements.

            
             

            
            9.2
                     Stock
            Withholding. When, under applicable law, a Participant incurs
            tax liability in connection with the exercise or vesting of any Award that is subject
            to tax withholding and the Participant is obligated to pay the Company the amount
            required to be withheld, the Committee may in its sole discretion allow the Participant
            to satisfy the minimum withholding tax obligation by electing to have the Company
            withhold from the Shares to be issued that number of Shares having a Fair Market Value
            equal to the minimum amount required to be withheld, determined on the date that the
            amount of tax to be withheld is to be determined. All elections by a Participant to
            have Shares withheld for this purpose will be made in accordance with the requirements
            established by the Committee and be in writing in a form acceptable to the
            Committee.

             

            
            10. 
              PRIVILEGES OF STOCK OWNERSHIP.
            No Participant will have any of the rights of a Shareholder with respect to any Shares
            until the Shares are issued to the Participant. After Shares are issued to the
            Participant, the Participant will be a Shareholder and have all the rights of a
            Shareholder with respect to such Shares, including the right to vote and receive all
            dividends or, other distributions made or paid with respect to such Shares; provided,
            that if such Shares are Restricted Stock, then any new, additional or different
            securities the Participant may become entitled to receive with respect to such Shares
            by virtue of a stock dividend, stock split or any other change in the corporate or
            capital structure of the Company will be subject to the same restrictions as the
            Restricted Stock; provided, further, that the Participant will have no right to retain
            such stock dividends or stock distributions with respect to Shares that are repurchased
            at the Participant’s Purchase Price or Exercise Price pursuant to Section
            12.

             

            	
                        
                         

                    	
                        
                        11. 

                    	
                        
                        TRANSFERABILITY.

                    

             

            
            11.1
                  Non-Transferability of
            Options. No Option granted under the Plan shall be
            transferable by the Participant otherwise than by will or by the laws of descent and
            distribution, and such option right shall be exercisable, during the
            Participant’s lifetime, only by the Participant. Notwithstanding the foregoing,
            the Committee may set forth in an Award Agreement at the time of grant or thereafter,
            that the Options (other than Incentive Stock Options) may be transferred to members of
            the Participant’s immediate family, to trusts solely for the benefit of such
            immediate family members and to partnerships or limited liability companies in which
            such family members and/or trusts are the only

             

            
            10

             

            

            
            
            

            

             

            
            partners or members, as the case may be. For this purpose, immediate
            family means the Participant’s spouse, parents, children, stepchildren,
            grandchildren and legal dependants. Any transfer of options made under this provision
            will not be effective until notice of such transfer is delivered to the
            Company.

            
             

            
            11.2       Rights
            of Transferee. Notwithstanding anything to the contrary
            herein, if an option has been transferred in accordance with Section 11.1 above, the
            option shall be exercisable solely by the transferee. The option shall remain subject
            to the provisions of the Plan, including that it will be exercisable only to the extent
            that the Participant or Participant’s estate would have been entitled to exercise
            it if the Participant had not transferred the Option. In the event of the death of the
            Participant prior to the expiration of the right to exercise the transferred option,
            the period during which the option shall be exercisable will terminate on the date 12
            months following the date of the Participant’s death. In no event will the option
            be exercisable after the expiration of the exercise period set forth in the Award
            Agreement. The Option shall be subject to such other rules relating to transferees as
            the Committee shall determine.

             

            
            12.  
            RESTRICTIONS ON SHARES. At the discretion
            of the Committee, the Company may reserve to itself and/or its assignee(s) in the Award
            Agreement a right to repurchase a portion of or all Unvested Shares held by a
            Participant following such Participant’s Termination at any time within three (3)
            months after the later of Participant’s Termination Date and the date Participant
            purchases Shares under this Plan, for cash and/or cancellation of purchase money
            indebtedness, at the Participant’s Exercise Price or Purchase Price, as the case
            may be.

            
             

            
            13.  
            CERTIFICATES. All certificates for Shares
            or other securities delivered under this Plan will be subject to such stock transfer
            orders, legends and other restrictions, consistent with the terms of the Awards, as the
            Committee may deem necessary or advisable, including restrictions under any applicable
            federal, state or foreign securities law, or any rules, regulations and other
            requirements of the SEC or any stock exchange or automated quotation system upon which
            the Shares may be listed or quoted.

            
             

            
            14.  
            ESCROW; PLEDGE OF SHARES. To enforce any
            restrictions on a Participant’s Shares, the Committee may require the Participant
            to deposit all certificates representing Shares, together with stock powers or other
            instruments of transfer approved by the Committee, appropriately endorsed in blank,
            with the Company or an agent designated by the Company to hold in escrow until such
            restrictions have lapsed or terminated, and the Committee may cause a legend or legends
            referencing such restrictions to be placed on the certificates. Any Participant who is
            permitted to execute a promissory note as partial or full consideration for the
            purchase of Shares under this Plan will be required to pledge and deposit with the
            Company all or part of the Shares so purchased as collateral to secure the payment of
            Participant’s obligation to the Company under the promissory note; provided,
            however, that the Committee may require or accept other or additional forms of
            collateral to secure the payment of such obligation and, in any event, the Company will
            have full recourse against the Participant under the promissory note notwithstanding
            any pledge of the Participant’s Shares or other collateral. In connection with
            any pledge of the Shares, Participant will be required to execute and deliver a written
            pledge agreement in such form as the Committee will from time to time approve. In the
            discretion of the Committee, the pledge agreement may provide that the Shares purchased
            with the promissory note may be released from the pledge on a pro rata basis as the
            promissory note is paid.

            
             

            
            15.  
            EXCHANGE AND BUYOUT OF AWARDS. The
            Committee may, at any time or from time to time, authorize the Company, with the
            consent of the respective Participants, to issue new Awards in exchange for the
            surrender and cancellation of any or all outstanding Awards. The Committee may at any
            time buy from a Participant an Award previously granted with payment in cash,
            Shares

             

            
            11

             

            

            
            
            

            

             

            
            (including Restricted Stock) or other consideration, based on such terms
            and conditions as the Committee and the Participant may agree.

            
             

            
            16. 
                     SECURITIES LAW
            AND OTHER STATUTORY AND REGULATORY COMPLIANCE.

             

            
            16.1  Securities
            Law. An Award will not be effective unless such Award is in
            compliance with all applicable federal and state securities laws, rules and regulations
            of any governmental body, and the requirements of any stock exchange or automated
            quotation system upon which the Shares may then be listed or quoted, as they are in
            effect on the date of grant of the Award and also on the date of exercise or other
            issuance. However, in the event that an Award is not effective as discussed in the
            preceding sentence, the Company will use reasonable efforts to modify, revise or renew
            such Award in a manner so as to make the Award effective. Notwithstanding any other
            provision in this Plan, the Company will have no obligation to issue or deliver
            certificates for Shares under this Plan prior to: (a) obtaining any approvals from
            governmental agencies that the Company determines are necessary or advisable; and/or
            (b) completion of any registration or other qualification of such Shares under any
            state or federal law or ruling of any governmental body that the Company determines to
            be necessary or advisable. The Company will be under no obligation to register the
            Shares with the SEC or to effect compliance with the registration, qualification or
            listing requirements of any state securities laws, stock exchange or automated
            quotation system, and the Company will have no liability for any inability or failure
            to do so.

            
             

            
            16.2  Section
            409A. This Plan and all Awards hereunder shall be interpreted
            in such manner as to comply with the requirements of Section 409A of the Code, its
            regulations and other guidance thereunder.

             

            
            17.   NO
            OBLIGATION TO EMPLOY. Nothing in this Plan or any Award
            granted under this Plan will confer or be deemed to confer on any Participant any right
            to continue in the employ of, or to continue any other relationship with, the Company
            or any Subsidiary of the Company or limit in any way the right of the Company or any
            Subsidiary of the Company to terminate Participant’s employment or other
            relationship at any time, with or without cause.

             

            
            18.  
            CORPORATE TRANSACTIONS.

             

            
            18.1
                  Assumption or Replacement of
            Awards by Successor. If a Change-of-Control Event
            occurs:

             

            
            (a)           
            the successor company in any Change-of-Control Event may, if approved in writing by the
            Committee prior to any Change-of-Control Event:

             

            
            (1)  
                    substitute equivalent
            options or Awards or provide substantially similar consideration to Participants as was
            provided to Shareholders (after taking into account the existing provisions of the
            Awards), or

            
             

            
            (2)  
                    issue, in place of
            outstanding Shares of the Company held by the Participant, substantially similar shares
            or substantially similar other securities or substantially similar other property
            subject to repurchase restrictions no less favorable to the Participant.

             

            
            (b)           
            Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole
            discretion, provide that the vesting of any or all options and Awards granted pursuant
            to this Plan will accelerate immediately prior to the consummation of a
            Change-of-Control Event. If the

             

            
            12

             

            

            
            
            

            

             

             

            
            Committee exercises such discretion with respect to Options, such
            options will become exercisable in full prior to the consummation of such event at such
            time and on such conditions as the Committee determines, and if such Options are not
            exercised prior to the consummation of such event, they shall terminate at such time as
            determined by the Committee.

             

            
            18.2       Other
            Treatment of Awards. Subject to any rights and limitations
            set forth in Section 18.1, if a Change-of-Control Event occurs or has occurred, any
            outstanding Awards will be treated as provided in the applicable agreement or plan of
            merger, consolidation, dissolution, liquidation, or sale of assets constituting the
            Change-of-Control Event.

            
             

            
            18.3
                   Assumption of Awards by the
            Company. The Company, from time to time, also may substitute
            or assume outstanding awards granted by another company, whether in connection with an
            acquisition of such other company or otherwise, by either (a) granting an Award under
            this Plan in substitution of such other company’s award, or (b) assuming such
            award as if it had been granted under this Plan if the terms of such assumed award
            could be applied to an Award granted under this Plan. Such substitution or assumption
            will be permissible if the holder of the substituted or assumed award would have been
            eligible to be granted an Award under this Plan if the other company had applied the
            rules of this Plan to such grant. If the Company assumes an award granted by another
            company, the terms and conditions of such award will remain unchanged (except that the
            exercise price and the number and nature of Shares issuable upon exercise of any such
            option will be adjusted appropriately pursuant to Section 424(a) of the Code). If the
            Company elects to grant a new Option rather than assuming an existing option, such new
            Option may be granted with a similarly adjusted Exercise Price.

            
             

            
            18.4
                  Adjustment of
            Shares. In the event that the number of outstanding shares is
            changed by a stock dividend, recapitalization, stock split, reverse stock split,
            subdivision, combination, reclassification or similar change in the capital structure
            of the Company without consideration, then (a) the number of Shares reserved for
            issuance under this Plan, (b) the Exercise Prices of and number of Shares subject to
            outstanding Options, and (c) the number of Shares subject to other outstanding Awards
            will be proportionately adjusted, subject to any required action by the Board or the
            Shareholders of the Company and compliance with applicable securities laws; provided,
            however, that fractions of a Share will not be issued but will either be replaced by a
            cash payment equal to the Fair Market Value of such fraction of a Share or will be
            rounded up to the nearest whole Share, as determined by the Committee.

             

            
            19.  
            ADOPTION AND SHAREHOLDER APPROVAL. This
            Plan will become effective on the date that this Plan is approved by the Shareholders
            of the Company, consistent with applicable laws (the “Effective
            Date”).

            
             

            
            20.  
            TERM OF PLAN. Unless earlier terminated as
            provided herein, this Plan will terminate ten (10) years from the date this Plan is
            adopted by the Board and approved by the Shareholders of the Company. The expiration of
            the Plan, however, shall not affect the rights of Participants under Options
            theretofore granted to them, and all unexpired options and Awards shall continue in
            force and operation after termination of the Plan, except as they may lapse or be
            terminated by their own terms and conditions.

            
             

            
            21.  
            AMENDMENT OR TERMINATION OF PLAN. The Board
            may at any time terminate or amend this Plan in any respect, including without
            limitation, amendment of any form of Award Agreement or instrument to be executed
            pursuant to this Plan; provided, however, that the Board will not, (i) without the
            approval of the Shareholders of the Company, amend this Plan in any manner that
            applicable law or regulation requires such Shareholder approval, or (ii) without the
            written consent of the Participant substantially alter or impair any Option or Award
            previously granted under the Plan. Notwithstanding the foregoing, if an option has been
            transferred in accordance with the terms of this Plan,

             

            
            13

             

            

            
            
            

            

             

            
            written consent of the transferee (and not the Participant) shall be
            necessary to substantially alter or impair any option or Award previously granted under
            the Plan.

            
             

            
            22.  
            EFFECT OF SECTION 162(m) OF THE CODE. The
            Plan, and all Awards designated by the Committee as “performance-based
            compensation” for purposes of Section 162(m) of the Code are intended to be
            exempt from the application of Section 162(m) of the Code, which restricts under
            certain circumstances the Federal income tax deduction for compensation paid by a
            public company to certain executives in excess of $1 million per year. The Committee
            may, without Shareholder approval (unless otherwise required to comply with Rule 16b-3
            under the Exchange Act or in accordance with applicable market or exchange
            requirements), amend the Plan retroactively and/or prospectively to the extent it
            determines necessary in order to comply with any subsequent clarification of Section
            162(m) of the Code required to preserve the Company’s Federal income tax
            deduction for compensation paid pursuant to the Plan. To the extent that the Committee
            determines as of the Date of Grant of an Award that (i) the Award is intended to comply
            with Section 162(m) of the Code and (ii) the exemption described above is no longer
            available with respect to such Award, such Award shall not be effective until any
            Shareholder approval required under Section 162(m) of the Code has been obtained.
            Notwithstanding the foregoing, if the Committee deems it to be in the best interest of
            the Company, the Committee retains the discretion to make such Awards under the Plan
            that may not comply with the requirements of Section 162(m) of the Code.

            
             

            	
                        
                         

                    	
                        
                        23.

                    	
                        
                        GENERAL.

                    

             

            
            23.1
                   Additional Provisions of an
            Award. Awards under the Plan also may be subject to such
            other provisions (whether or not applicable to the benefit awarded to any other
            Participant) as the Committee determines appropriate including, without limitation,
            provisions to assist the Participant in financing the purchase of Stock upon the
            exercise of Options, provisions for the forfeiture of or restrictions on resale or
            other disposition of shares of Stock acquired under any Award, provisions giving the
            Company the right to repurchase shares of Stock acquired under any Award in the event
            the Participant elects to dispose of such shares, provisions which restrict a
            Participant’s ability to sell Shares for a period of time under certain
            circumstances, and provisions to comply with Federal and state securities laws and
            Federal and state tax withholding requirements. Any such provisions shall be reflected
            in the applicable Award Agreement. In addition, the Committee may, in its discretion,
            provide in an Award Agreement that, in the event that the Participant engages, within a
            specified period after termination of employment, in certain activity specified by the
            Committee that is deemed detrimental to the interests of the Company (including, but
            not limited to, the breach of any non-solicitation and/or non-compete agreements with
            the Company), the Participant will forfeit all rights under any Options that remain
            outstanding as of the time of such act and will return to the Company an amount of
            shares with a Fair Market Value (determined as of the date such shares are returned)
            equal to the amount of any gain realized upon the exercise of any Option that occurred
            within a specified time period.

             

            
            23.2.       Claim
            to Awards and Employment Rights. Unless otherwise expressly
            agreed in writing by the Company, no employee or other person shall have any claim or
            right to be granted an Award under the Plan or, having been selected for the grant of
            an Award, to be selected for a grant of any other Award.

            
             

            
            23.3.      Designation
            and Change of Beneficiary. Each Participant shall file with
            the Committee a written designation of one or more persons as the beneficiary who shall
            be entitled to receive the amounts payable with respect to an Award of Restricted
            Stock, if any, due under the Plan upon his death. A Participant may, from time to time,
            revoke or change his beneficiary designation without the consent of any prior
            beneficiary by filing a new designation with the Committee. The last such designation
            accepted by the Committee shall be controlling; provided, however, that no
            designation,

             

            
            14

             

            
            

            

             

            

            

             

            or
            change or revocation thereof, shall be effective unless accepted by the Committee prior
            to the Participant’s death, and in no event shall it be effective as of a date
            prior to such receipt. If no beneficiary designation is filed by the Participant, the
            beneficiary shall be deemed to be the Participant's spouse or, if the Participant is
            unmarried at the time of death, the Participant's estate.

             

            
            23.4.      Payments to
            Persons Other Than Participants. If the Committee shall find
            that any person to whom any amount is payable under the Plan is unable to care for his
            or her affairs because of illness or accident, or is a minor, or is otherwise legally
            incompetent or incapacitated or has died, then any payment due to such person or such
            person’s estate (unless a prior claim therefor has been made by a duly appointed
            legal representative) may, if the Committee so directs the Company, be paid to such
            person’s spouse, child, relative, an institution maintaining or having custody of
            such person, or any other person deemed by the Committee, in its absolute discretion,
            to be a proper recipient on behalf of such person otherwise entitled to payment. Any
            such payment shall be a complete discharge of the liability of the Committee and the
            Company therefor.

            
             

            
            23.5.      No
            Liability of Committee Members. No member of the Committee
            shall be personally liable by reason of any contract or other instrument executed by
            such Committee member or on such member's behalf in such member's capacity as a member
            of the Committee nor for any mistake of judgment made in good faith, and the Company
            shall indemnify and hold harmless each member of the Committee and each other employee,
            officer or director of the Company to whom any duty or power relating to the
            administration or interpretation of the Plan may be allocated or delegated, against any
            cost or expense (including counsel fees) or liability (including any sum paid in
            settlement of a claim) arising out of any act or omission to act in connection with the
            Plan unless arising out of such person’s own fraud or willful bad faith;
            provided, however, that approval of the Board shall be required for the payment of any
            amount in settlement of a claim against any such person. The foregoing right of
            indemnification shall not be exclusive of any other rights of indemnification to which
            such persons may be entitled under the Company’s Articles of Incorporation or
            By-Laws, as a matter of law, or otherwise, or any power that the Company may have to
            indemnify them or hold them harmless.

            
             

            
            23.6.
                  Governing
            Law. The Plan and all agreements hereunder shall be governed
            by and construed in accordance with the internal laws of the State of Utah without
            regard to the principles of conflicts of law thereof.

            
             

            
            23.7.
                  Funding.
            No provision of the Plan shall require the Company, for the purpose of satisfying any
            obligations under the Plan, to purchase assets or place any assets in a trust or other
            entity to which contributions are made or otherwise to segregate any assets, nor shall
            the Company maintain separate bank accounts, books, records or other evidence of the
            existence of a segregated or separately maintained or administered fund for such
            purposes. Participants shall have no rights under the Plan other than as general
            unsecured creditors of the Company, except that insofar as they may have become
            entitled to payment of additional compensation by performance of services, they shall
            have the same rights as other employees under general law.

            
             

            
            23.8.      Reliance on
            Reports. Each member of the Committee and each member of the
            Board shall be fully justified in relying, acting or failing or refusing to act, and
            shall not be liable for having so relied, acted or failed or refused to act in good
            faith, upon any report made by the independent public accountant of the Company and its
            subsidiaries and Affiliates and upon any other information furnished in connection with
            the Plan by any person or persons other than himself.

            
             

            
            23.9.
                 Relationship to Other
            Benefits. No payment under the Plan shall be taken into
            account in determining any benefits under any pension, retirement, profit sharing,
            group insurance or

             

            
            15

             

            

            
            
            

            

             

            
            other benefit plan of the Company or any Subsidiary except as otherwise
            specifically provided in such other plan.

             

            
            23.10.
                Expenses. The
            expenses of administering the Plan shall be borne by the Company and its Subsidiaries
            and Affiliates.

            
             

            
            23.11.
                Pronouns. Masculine
            pronouns and other words of masculine gender shall refer to both men and
            women.

            
             

            
            23.12.    Titles and
            Headings. The titles and headings of the sections in the Plan
            are for convenience of reference only, and in the event of any conflict, the text of
            the Plan, rather than such titles or headings shall control.

            
             

            
            23.13.    Termination of
            Employment. For all purposes herein, a person who transfers
            from employment or service with the Company to employment or service with a Subsidiary
            or Affiliate or vice versa shall not be deemed to have terminated employment or service
            with the Company, a Subsidiary or Affiliate.

            
             

            
            23.14     Nonexclusivity of
            the Plan. Neither the adoption of this Plan by the Board, the
            submission of this Plan to the Shareholders of the Company for approval, nor any
            provision of this Plan will be construed as creating any limitations on the power of
            the Board to adopt such incentive arrangements as it may deem desirable, including,
            without limitation, the granting of stock options and bonuses otherwise than under this
            Plan, and such arrangements may be either generally applicable or applicable only in
            specific cases.

            
             

            
            23.15      Employees
            Based Outside of the United States. Notwithstanding any
            provision of the Plan to the contrary, in order to foster and promote achievement of
            the purposes of the Plan or to comply with provisions of laws in other countries in
            which the Company, its Affiliates, and its Subsidiaries operate or have employees, the
            Committee, in its sole discretion, shall have the power and authority to (i) determine
            which employees employed outside the United States are eligible to participate in the
            Plan, (ii) modify the terms and conditions of Awards granted to employees who are
            employed outside the United States, and (iii) establish subplans (through the addition
            of schedules to the Plan or otherwise), modify option exercise procedures and other
            terms and procedures to the extent such actions may be necessary or
            advisable.

             

            
            24.
                    DEFINITIONS
            . As used in this Plan, the following terms will have the following
            meanings:

             

            
            “Adjusted Business Unit EBITDA” means, for any period, for
            the selected business unit, an amount equal to the sum of (without duplication) (a) Net
            Income, (b) Net Interest Charges, (c) the amount of taxes, based on or measured by
            income, used or included in tax expense deducted in determining such Net Income, (d)
            the amount of depreciation and amortization expense deducted in determining such Net
            Income, (e) the amount of integration expenses (as identified on the business unit's
            profit and loss statements) incurred during such period, (f) other non-recurring
            expenses incurred during such period, (g) any related party charges, (h) any items
            included in “net other expenses” as listed on the business unit's income
            statement, (i) all participating executives' bonuses that are paid out under the Plan
            and any performance awards paid under the Bio-Path Holdings, Inc. 2007 Stock Incentive
            Plan, and (j) any adjustments that appear on the business unit's computation of pro
            forma earnings as publicly announced by the Company; and, except with regard to item
            (j) above, all determined in accordance with GAAP. Adjusted Business Unit EBITDA will
            also be calculated without reference to any discontinued operations. 

             

            
            16

             

            

            
            
            

            

             

             

            
            “Adjusted EBITDA” means, for any period, for the Company and
            its subsidiaries, an amount equal to the sum of (without duplication) (a) Consolidated
            Net Income, (b) Consolidated Net Interest Charges, (c) the amount of taxes, based on or
            measured by income, used or included in tax expense deducted in determining such
            Consolidated Net Income, (d) the amount of depreciation and amortization expense
            deducted in determining such Consolidated Net Income, (e) the amount of integration
            expenses (as identified on Company's profit and loss statements) incurred during such
            period, (f) other non-recurring expenses incurred during such period, (g) any items
            (other than gains or losses on put options on Company stock) included in “net
            other expenses” as listed on the Company's consolidated income statement, (h) any
            related party charges, (i) all participating executives' bonuses that are paid out
            under the Bio-Path Holdings, Inc. 2007 Annual Incentive Plan and any performance awards
            paid under the Bio-Path Holdings, Inc. 2007 Stock Incentive Plan, and (j) any
            adjustments that appear on the Company's computation of pro forma earnings as publicly
            announced by the Company; all determined on a consolidated basis and except with regard
            to item (j) above, in accordance with GAAP. Adjusted EBITDA will also be calculated
            without reference to any discontinued operations. 

            
             

            
            “Affiliate” means any entity in which the Company has an
            ownership interest of at least 20%.

            
             

            
            “Award” means any award under this Plan, including any
            Option, Restricted Stock, Performance Award or other stock-based Award.

            
             

            
            “Award Agreement” means, with respect to each Award, the
            signed written agreement between the Company and the Participant setting forth the
            terms and conditions of the Award.

            
             

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

            
             

            
            “Cause” means the Company, a Subsidiary or Affiliate having
            cause to terminate a Participant’s employment or service under any existing
            employment, consulting or any other agreement between the Participant and the Company
            or a Subsidiary or Affiliate or, in the absence of such an employment, consulting or
            other agreement, upon (i) the determination by the Committee that the Participant has
            ceased to perform his duties to the Company, a Subsidiary or Affiliate (other than as a
            result of his incapacity due to physical or mental illness or injury), which failure
            amounts to an intentional and extended neglect of his duties to such party, (ii) the
            Committee’s determination that the Participant has engaged or is about to engage
            in conduct materially injurious to the company, a Subsidiary or Affiliate or (iii) the
            Participant having been convicted of a felony or a misdemeanor carrying a jail sentence
            of six months or more.

            
             

            
            “Change-of-Control Event” means the occurrence of any one or
            more of the following events: (i) there shall have been a change in a majority of the
            Board of Directors of the Company within a one (1) year period, unless the appointment
            of a director or the nomination for election by the Company’s Shareholders of
            each new director was approved by the vote of a majority of the directors then still in
            office who were in office at the beginning of such one (1) year period, or (ii) the
            Company shall have been sold by either (A) a sale of all or substantially all its
            assets, or (B) a merger or consolidation, other than any merger or consolidation
            pursuant to which the Company acquires another entity, or (C) a tender offer, whether
            solicited or unsolicited.

            
             

            
            “Code” means the Internal Revenue Code of 1986, as amended.
            Reference in the Plan to any section of the Code shall be deemed to include any
            amendments or successor provisions to such section and any regulations under such
            section.

             

            
            17

             

            

            
            
            

            

             

             

            
            “Common Stock” means the outstanding common stock, of the
            Company, or any other class of securities into which substantially all the Common Stock
            is converted or for which substantially all the Common Stock is exchanged.

            
             

            
            “Committee” means the Compensation Committee, the Stock
            Option Committee or such other committee appointed by the Board consisting solely of
            two or more Outside Directors or the Board.

            
             

            
            “Company” means Bio-Path Holdings, Inc., a Utah corporation,
            or any successor corporation.

            
             

            
            “Consolidated Net Income” means, for any period, for the
            Company and its subsidiaries, the net income of the Company and its subsidiaries from
            continuing operations without giving effect to extraordinary net gains or extraordinary
            net losses, all determined on a consolidated basis in accordance with GAAP, and
            consistent with past practices.

            
             

            
            “Consolidated Net Interest Charges” means, for any period,
            for the Company and its subsidiaries, the sum of, without duplication, (a) all
            interest, premium payments, commissions, fees, charges and related expenses (and
            interest income) of the Company and its subsidiaries in connection with indebtedness
            (including capitalized interest) or bank accounts, money market accounts and investment
            accounts, or financing leases and notes receivable, or in connection with the deferred
            purchase price of assets, in each case to the extent treated as interest in accordance
            with GAAP, and (b) the portion of rent expense of the Company and its subsidiaries with
            respect to such period under capital leases that is treated as interest in accordance
            with GAAP.

            
             

            
            “Disability” or “Disabled” means a disability,
            whether temporary or permanent, partial or total, as determined in good faith by the
            Committee. Where relevant, the Committee shall apply a definition that complies with
            one set forth in Section 409A of the Code.

            
             

            
            “Exchange Act” means the Securities Exchange Act of 1934, as
            amended.

            
             

            
            “Exercise Price” means the price at which a holder of an
            Option may purchase the Shares issuable upon exercise of the Option.

            
             

            
            “Fair Market Value” means, as of any date, the value of a
            share of the Company’s Common Stock determined as follows:

             

            
            (a)  
                   if such Common Stock is
            publicly traded and is then listed on a national securities exchange or quoted on a
            national automated quotation system, its closing price on the date of determination on
            the principal national securities exchange on which the Common Stock is listed or
            admitted to trading, and if there were no trades on such date, on the day on which a
            trade occurred next preceding such date;

            
             

            
            (b) 
                    if such Common Stock is
            publicly traded and is then quoted on the NASDAQ Global Market, its closing price on
            the NASDAQ Global Market on the date of determination as reported in The Wall Street
            Journal, and if there were no trades on such date, on the day on which a trade occurred
            next preceding such date;

            
             

            
            (c)  
                  if such Common Stock is publicly
            traded but is not quoted on the NASDAQ National market nor listed or admitted to
            trading on a national securities exchange, the average of the closing bid and asked
            prices on the date of determination as reported in The Wall Street Journal or, if not
            reported in The Wall Street Journal, as reported by any reputable publisher or
            quotation service, as

             

            
            18

             

            
            

            

             

            

            

             

            
            determined by the Committee in good faith, and if there were no trades
            on such date, on the day on which a trade occurred next preceding such date;

            
             

            
            (d)  
                    if none of the foregoing
            is applicable, by the Committee in good faith based upon factors available at the time
            of the determination, including, but not limited to, capital raising activities of the
            Company.

             

            
            “GAAP” means generally accepted accounting principles in the
            United States.

            
             

            
            “Insider” means an officer or director of the Company or any
            other person whose transactions in the Company’s Common Stock are subject to
            Section 16 of the Exchange Act.

            
             

            
            “NASD Dealer” has the meaning set forth in section
            8(e).

            
             

            
            “Net Income” means, for any period, for the selected
            business unit, the net income of the business unit from continuing operations without
            giving effect to extraordinary net gains or extraordinary net losses, all determined in
            accordance with GAAP, and consistent with past practices. 

            
             

            
            “Net Interest Charges” means, for any period, for the
            selected business unit, the sum of, without duplication, (a) all interest, premium
            payments, commissions, fees, charges and related expenses (and interest income) of the
            business unit in connection with indebtedness (including capitalized interest) or bank
            accounts, money market accounts and investment accounts, or financing leases and notes
            receivable, or in connection with the deferred purchase price of assets, in each case
            to the extent treated as interest in accordance with GAAP, and (b) the portion of rent
            expense of the business with respect to such period under capital leases that is
            treated as interest in accordance with GAAP. 

            
             

            
            “NQSOs” has the meaning set forth in Section 5.

            
             

            
            “Option” means an award of an option to purchase Shares
            pursuant to Section 5.

            
             

            
            “Outside Director” means a person who is both (i) a
            “nonemployee director” within the meaning of Rule 16b-3 under the Exchange
            Act, or any successor rule or regulation and (ii) an “outside director”
            within the meaning of Section 162(m) of the Code.

            
             

            
            “Participant” means a person who receives an Award
            under this Plan.

            
             

            
            “Performance Award” means an Award of Shares, or cash in
            lieu of Shares, pursuant to Section 7.

            
             

            
            “Performance Factors” means the factors selected by the
            Committee from time to time, including, but not limited to, the following measures to
            determine whether the performance goals established by the Committee and applicable to
            Awards have been satisfied: revenue; net revenue; revenue growth; net revenue growth;
            earnings before interest, taxes, depreciation and amortization (“EBITDA”);
            Adjusted EBITDA; Adjusted Business Unit EBITDA, EBITDA growth, Adjusted EBITDA growth
            and Adjusted Business Unit EBITDA growth; funds from operations; funds from operations
            per share; operating income (loss); operating income growth; operating cash flow;
            adjusted operating cash flow return on income; net income; net income growth; pre- or
            after-tax income (loss); cash available for distribution; cash available for
            distribution per share; cash and/or cash equivalents available for operations; net
            earnings (loss); earnings (loss) per share; earnings per share growth; return on
            equity; return on assets; share price performance (based on historical performance or
            in relation to selected organizations or indices); total shareholder return; total
            shareholder return growth; economic value added; improvement in

             

            
            19

             

            

            
            
            

            

             

            
            cash-flow (before or after tax); successful capital raises; successful
            completion of acquisitions; and confidential business unit objectives. A Performance
            Factor may be measured over a Performance Period on a periodic, annual, cumulative or
            average basis and may be established on a company-wide basis or established with
            respect to one or more operating units, divisions, subsidiaries, acquired businesses,
            minority investments, partnerships or joint ventures. Unless otherwise determined by
            the Company by no later than the earlier of the date that is ninety (90) days after the
            commencement of the Performance Period or the day prior to the date on which
            twenty-five percent (25%) of the Performance Period has elapsed, the Performance
            Factors will be determined by not accounting for a change in GAAP during a Performance
            Period

             

            
            “Performance Period” means the period of service determined
            by the Committee, not to exceed five years, during which years of service or
            performance is to be measured for Restricted Stock Awards or Performance
            Awards.

            
             

            
            “Plan” means the Bio-Path Holdings, Inc. 2007 Stock
            Incentive Plan, as amended from time to time.

            
             

            
            “Restricted Stock Award” means an award of Shares pursuant
            to Section 6.

            
             

            
            “SEC” means the Securities and Exchange
            Commission.

            
             

            
            “Securities Act” means the Securities Act of 1933, as
            amended.

            
             

            
            “Shares” means shares of the Company’s Common Stock
            reserved for issuance under this Plan, as adjusted pursuant to Section 18, and any
            successor security.

            
             

            
            “Stock Unit” means an Award giving the right to receive
            Shares granted under either Section 6.8 or Section 7 of the Plan.

            
             

            
            “Subsidiary” means any corporation or other legal entity
            (other than the Company) in an unbroken chain of corporations and/or other legal
            entities beginning with the Company if each of the corporations and entities other than
            the last corporation or entity in the unbroken chain owns stock, other equity
            securities or other equity interests possessing 50% or more of the total combined
            voting power of all classes of stock, other equity securities or other equity interests
            in one of the other corporations or entities in such chain.

            
             

            
            “Ten Percent Shareholder” has the meaning set forth in
            Section 5.2.

            
             

            
            “Termination” or “Terminated” means, for
            purposes of this Plan with respect to a Participant, that the Participant has for any
            reason ceased to provide services as an employee, officer, director, consultant,
            independent contractor, or advisor to the Company or Subsidiary of the Company. An
            employee will not be deemed to have ceased to provide services in the case of (i) sick
            leave, (ii) military leave, or (iii) any other leave of absence approved by the
            Committee, provided, that such leave is for a period of not more than 90 days, unless
            re-employment upon the expiration of such leave is guaranteed by contract or statute or
            unless provided otherwise pursuant to formal policy adopted from time to time by the
            Company and issued and promulgated to employees in writing. In the case of any employee
            on an approved leave of absence, the Committee may make such provisions respecting
            suspension of vesting of the Award while on leave from the employ of the Company or a
            Subsidiary as it may deem appropriate, except that in no event may an Option be
            exercised after the expiration of the term set forth in the option agreement. The
            Committee will have sole discretion to determine whether a Participant has ceased to
            provide services and the effective date on which the Participant ceased to provide
            services (the “Termination Date”). 

             

            
            20

             

            

            
            
            

            

             

             

            
            “Unvested Shares” means “Unvested Shares” as
            defined in the Award Agreement.

            
             

            
            “Vested Shares” means “Vested Shares” as defined
            in the Award Agreement.

            
             

            
            Certification

             

            
            The undersigned, being the Secretary of Bio-Path Holdings, Inc., a Utah
            corporation, hereby certifies that the foregoing is a true and complete copy of
            Bio-Path Holdings, Inc. 2007 Stock Incentive Plan, as duly adopted on ________, 2007,
            and approved by the Shareholders of the Company on ________, 2007, and that such plan
            is in full force and effect on the date hereof, without amendment or
            modification.

            	
                        
                         

                    	
                        
                         

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        Bio-Path Holdings, Inc..

                    
	
                        
                        

                         

                    	
                        
                        

                         

                    	
                        
                        

                         

                    
	
                        
                         

                    	
                        
                        By:  

                    	
                        
                         

                    
	
                        
                         

                    	
                        
                        ___________________________

                        
                        Name:

                    
	
                        
                         

                    	
                        
                        Title:

                    

             

             

             

            
            21

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