Document:

Exhibit
4.1

    SUBAYE,
INC.

    2010
OMNIBUS LONG-TERM INCENTIVE PLAN

     

    Subaye,
Inc., a Delaware corporation (the “Company”), sets forth herein the terms of its
2010 Omnibus Long-Term Incentive Plan (the “Plan”), as follows:

     

    
      	
              1.

            	
              PURPOSE

            

    

     

    The Plan
is intended to enhance the Company’s and its Affiliates’ (as defined herein)
ability to attract and retain highly qualified officers, directors, key
employees and other persons, and to motivate such officers, directors, key
employees and other persons to serve the Company and its Affiliates and to
expend maximum effort to improve the business results and earnings of the
Company, by providing to such persons an opportunity to acquire or increase a
direct proprietary interest in the operations and future success of the Company.
To this end, the Plan provides for the grant of stock options, stock
appreciation rights, restricted stock, restricted stock units, unrestricted
stock and cash awards. Any of these awards may, but need not, be made as
performance incentives to reward attainment of annual or long-term performance
goals in accordance with the terms hereof. Stock options granted under the Plan
may be non-qualified stock options or incentive stock options, as provided
herein.

     

    
      	
              2.

            	
              DEFINITIONS

            

    

     

    For
purposes of interpreting the Plan and related documents (including Award
Agreements), the following definitions shall apply:

     

    2.1.           “Affiliate” means any company
or other trade or business that “controls,” is “controlled by” or is “under
common control” with the Company within the meaning of Rule 405 of Regulation C
under the Securities Act, including, without limitation, any
Subsidiary.

     

    2.2.           “Annual Incentive Award” means
an Award made subject to attainment of performance goals (as described in
Section 13) over a performance period of a duration as specified by the
Committee.

     

    2.3.           “Award” means a grant of an
Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit,
Unrestricted Stock, or cash award under the Plan.

     

    2.4.            “Award Agreement” means a
written agreement between the Company and a Grantee, or notice from the Company
to a Grantee, that evidences and sets out the terms and conditions of an
Award.

     

    2.5.           
“Board” means the Board
of Directors of the Company.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    2.6.           “Cause” means, as determined
by the Committee and unless otherwise provided in an applicable agreement with
the Company or an Affiliate at or before the Grant Date: (i) engaging in any
act, omission or misconduct that is injurious to the Company or its Affiliates;
(ii) gross negligence or willful misconduct in connection with the performance
of duties; (iii) conviction of a criminal offense (other than minor traffic
offenses); (iv) fraud, embezzlement or misappropriation of funds or property of
the Company or an Affiliate; (v) material breach of any term of any
employment, consulting or other services, confidentiality, intellectual property
or non-competition agreements, if any, between the Service Provider and the
Company or an Affiliate; (vi) the entry of an order duly issued by any
regulatory agency (including federal, state and local regulatory agencies and
self-regulatory bodies) having jurisdiction over the Company or an Affiliate
requiring the removal from any office held by the Service Provider with the
Company or prohibiting a Service Provider from participating in the business or
affairs of the Company or any Affiliate; or (vii) the revocation or threatened
revocation of any of the Company’s or an Affiliate’s  government
licenses, permits or approvals, which is primarily due to the Service Provider’s
action or inaction and such revocation or threatened revocation would be
alleviated or mitigated in any material respect by the termination of the
Service Provider’s Services.

     

    2.7.           “Change in Control” shall have
the meaning set forth in Section 15.2.

     

    2.8.           “Code” means the Internal
Revenue Code of 1986, as now in effect or as hereafter amended.

     

    2.9.           “Committee” means the
Compensation Committee of the Board, or such other committee as determined by
the Board.  The Compensation Committee of the Board may, in its
discretion, designate a subcommittee of its members to serve as the Committee
(to the extent the Board has not designated another person, committee or entity
as the Committee) or to cause the Committee to (i) consist solely of persons who
are “Nonemployee Directors” as defined in Rule 16b-3 issued under the Exchange
Act, (ii) consist solely of persons who are Outside Directors, or (iii) satisfy
the applicable requirements of any stock exchange on which the Common Stock may
then be listed.

     

    2.10.         “Company” means Subaye, Inc.,
a Delaware corporation, or any successor corporation.

     

    2.11.         “Common Stock” or “Stock”
means a share of common stock of the Company, par value $0.001 per
share.

     

    2.12.         “Covered Employee” means a
Grantee who is a “covered employee” within the meaning of Section 162(m)(3)
of the Code, as qualified by Section 13.4 herein.

     

    2.13.         “Disability” means the Grantee
is unable to perform each of the essential duties of such Grantee’s position by
reason of a medically determinable physical or mental impairment which is
potentially permanent in character or which can be expected to last for a
continuous period of not less than 12 months; provided, however, that, with
respect to rules regarding expiration of an Incentive Stock Option following
termination of the Grantee’s Service, Disability has the meaning as set forth in
Section 22(e)(3) of the Code.

     

    2.14.         “Effective Date” means the
date set forth in Section
16.10 herein.

     

    2.15.         “Exchange Act” means the
Securities Exchange Act of 1934, as now in effect or as hereafter
amended.

    
      
         

      

      
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    2.16.         “Fair Market Value” of a share
of Common Stock as of a particular date shall mean (i) the closing sale price
reported for a share of Common Stock on such date on the national securities
exchange or national market system on which such stock is principally traded, or
if such date is not a trading day, the trading day immediately preceding such
date on which a sale was reported, or (ii) if the shares of Common Stock are not
then listed on a national securities exchange or national market system, or the
value of such shares is not otherwise determinable, such value as determined by
the Board in good faith in its sole discretion (but in any event not less than
fair market value within the meaning of Section 409A).

     

    2.17.         “Family Member” means a person
who is a spouse, former spouse, child, stepchild, grandchild, parent,
stepparent, grandparent, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law,
including adoptive relationships, of the applicable individual, any person
sharing the applicable individual’s household (other than a tenant or employee),
a trust in which any one or more of these persons have more than fifty percent
of the beneficial interest, a foundation in which any one or more of these
persons (or the applicable individual) control the management of assets, and any
other entity in which one or more of these persons (or the applicable
individual) own more than fifty percent of the voting interests.

     

    2.18.         “Grant Date” means, as
determined by the Committee, the latest to occur of (i) the date as of
which the Committee approves an Award, (ii) the date on which the recipient
of an Award first becomes eligible to receive an Award under Section 6
hereof, or (iii) such other date as may be specified by the Committee in
the Award Agreement.

     

    2.19.         “Grantee” means a person who
receives or holds an Award under the Plan.

     

    2.20.         “Incentive Stock Option” means
an “incentive stock option” within the meaning of Section 422 of the Code,
or the corresponding provision of any subsequently enacted tax statute, as
amended from time to time.

     

    2.21.         “Non-Qualified Stock Option”
means an Option that is not an Incentive Stock Option.

     

    2.22.         “Option” means an option to
purchase one or more shares of Stock pursuant to the Plan.

     

    2.23.         “Option Price” means the
exercise price for each share of Stock subject to an Option.

     

    2.24.         “Outside Director” means a
member of the Board who is not an officer or employee of the Company or an
Affiliate, determined in accordance with the requirements of Section 162(m) of
the Code.

     

    2.25.         “Performance Award” means an
Award made subject to the attainment of performance goals (as described in
Section 13) over a performance period of up to ten
(10) years.

     

    2.26.         “Plan” means this Subaye, Inc.
2010 Omnibus Long-Term Incentive Plan.

     

    2.27.         “Purchase Price” means the
purchase price for each share of Stock pursuant to a grant of Restricted Stock
or Unrestricted Stock.

     

    2.28.         “Reporting Person” means a
person who is required to file reports under Section 16(a) of the Exchange
Act.

    
      
         

      

      
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    2.29.         “Restricted Stock” means
shares of Stock, awarded to a Grantee pursuant to Section 10
hereof.

     

    2.30.         “Restricted Stock Unit” means
a bookkeeping entry representing the equivalent of shares of Stock, awarded to a
Grantee pursuant to Section 10 hereof.

     

    2.31.         “SAR Exercise Price” means the
per share exercise price of a SAR granted to a Grantee under Section 9
hereof.

     

    2.32.         “Section 409A” shall mean
Section 409A of the Code and all formal guidance and regulations
promulgated thereunder.

     

    2.33.         “Securities Act” means the
Securities Act of 1933, as now in effect or as hereafter amended.

     

    2.34.         “Separation from Service”
means a termination of Service by a Service Provider, as determined by the
Committee, which determination shall be final, binding and conclusive; provided
if any Award governed by Section 409A is to be distributed on a Separation
from Service, then the definition of Separation from Service for such purposes
shall comply with the definition provided in Section 409A.

     

    2.35.         “Service” means service as a
Service Provider to the Company or an Affiliate. Unless otherwise stated in the
applicable Award Agreement, a Grantee’s change in position or duties shall not
result in interrupted or terminated Service, so long as such Grantee continues
to be a Service Provider to the Company or an Affiliate.

     

    2.36.         “Service Provider” means an
employee, officer or director of the Company or an Affiliate, or a consultant or
adviser currently providing services to the Company or an
Affiliate.

     

    2.37.         “Stock Appreciation Right” or
“SAR” means a right granted to a Grantee under Section 9
hereof.

     

    2.38.         “Subsidiary” means any
“subsidiary corporation” of the Company within the meaning of
Section 424(f) of the Code.

     

    2.39.         “Termination Date” means the
date upon which an Option shall terminate or expire, as set forth in
Section 8.3 hereof.

     

    2.40.         “Ten Percent Stockholder”
means an individual who owns more than ten percent (10%) of the total
combined voting power of all classes of outstanding stock of the Company, its
parent or any of its Subsidiaries. In determining stock ownership, the
attribution rules of Section 424(d) of the Code shall be
applied.

     

    2.41.         “Unrestricted Stock” means an
Award pursuant to Section 11 hereof.

    
      
         

      

      
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              3.

            	
              ADMINISTRATION
      OF THE PLAN

            

    

     

    3.1.           General.

     

    The
Committee shall have such powers and authorities related to the administration
of the Plan as are consistent with the Company’s certificate of incorporation
and bylaws and applicable law. The Committee shall have full power and authority
to take all actions and to make all determinations required or provided for
under the Plan, any Award or any Award Agreement, and shall have full power and
authority to take all such other actions and make all such other determinations
not inconsistent with the specific terms and provisions of the Plan that the
Committee deems to be necessary or appropriate to the administration of the
Plan.  The interpretation and construction by the Committee of any
provision of the Plan, any Award or any Award Agreement shall be final, binding
and conclusive. Without limitation, the Committee shall have full and final
authority, subject to the other terms and conditions of the Plan,
to:

     

    (i)
designate Grantees;

     

    (ii)
determine the type or types of Awards to be made to a Grantee;

     

    (iii)
determine the number of shares of Stock to be subject to an Award;

     

    (iv)
establish the terms and conditions of each Award (including, but not limited to,
the Option Price of any Option, the nature and duration of any restriction or
condition (or provision for lapse thereof) relating to the vesting, exercise,
transfer, or forfeiture of an Award or the shares of Stock subject thereto, and
any terms or conditions that may be necessary to qualify Options as Incentive
Stock Options);

     

    (v)
prescribe the form of each Award Agreement; and

     

    (vi)
amend, modify, or supplement the terms of any outstanding Award including the
authority, in order to effectuate the purposes of the Plan, to modify Awards to
foreign nationals or individuals who are employed outside the United States
to recognize differences in local law, tax policy, or custom.

     

    Notwithstanding
the foregoing, no amendment or modification may be made to an outstanding Option
or SAR that (i)  causes the Option or SAR to become subject to
Section 409A, (ii) reduces the Option Price or SAR Exercise Price,
either by lowering the Option Price or SAR Exercise Price or by canceling the
outstanding Option or SAR and granting a replacement Option or SAR with a lower
Option Price or SAR Exercise Price or (iii) would be treated as a repricing
under the rules of the exchange upon which the Company’s Stock trades, without,
with respect to item (i), the Grantee’s written prior approval, and with respect
to items (ii) and (iii), without the approval of the stockholders of the
Company, provided, that, appropriate adjustments may be made to outstanding
Options and SARs pursuant to Section 15.

     

    The
Company may retain the right in an Award Agreement to cause a forfeiture of the
gain realized by a Grantee on account of actions taken by the Grantee in
violation or breach of or in conflict with any employment agreement,
non-competition agreement, any agreement prohibiting solicitation of employees
or clients of the Company or any Affiliate thereof or any confidentiality
obligation with respect to the Company or any Affiliate thereof or otherwise in
competition with the Company or any Affiliate thereof, to the extent specified
in such Award Agreement applicable to the Grantee.  Furthermore, the
Company may annul an Award if the Grantee is terminated for Cause as defined in
the applicable Award Agreement or the Plan, as applicable. The grant of any
Award may be contingent upon the Grantee executing the appropriate Award
Agreement.

    
      
         

      

      
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    3.2.           Deferral
Arrangement.

     

    The
Committee may permit or require the deferral of any Award payment into a
deferred compensation arrangement, subject to such rules and procedures as it
may establish and in accordance with Section 409A, which may include
provisions for the payment or crediting of interest or dividend equivalents,
including converting such credits into deferred Stock units.

     

    3.3.           No
Liability.

     

    No member
of the Board or of the Committee shall be liable for any action or determination
made in good faith with respect to the Plan, any Award or Award
Agreement.

     

    3.4.           Book
Entry.

     

    Notwithstanding
any other provision of this Plan to the contrary, the Company may elect to
satisfy any requirement under this Plan for the delivery of stock certificates
through the use of book-entry.

     

    
      	
              4.

            	
              STOCK
      SUBJECT TO THE PLAN

            

    

     

    Subject
to adjustment as provided in Section 15 hereof, the
maximum number of shares of Stock available for issuance under the Plan shall be
900,000. All such shares of Stock available for issuance under the Plan shall be
available for issuance pursuant to Incentive Stock Options.  Stock
issued or to be issued under the Plan shall be authorized but unissued shares;
or, to the extent permitted by applicable law, issued shares that have been
reacquired by the Company.  The maximum number of Common Stock that
will be awarded to any one Grantee during any calendar year shall not exceed
50,000.

     

    The
Committee may adopt reasonable procedures for making adjustments in accordance
with Section 15. If
the Option Price of any Option granted under the Plan, or if pursuant to Section 16.3 the
withholding obligation of any Grantee with respect to an Option or other Award,
is satisfied by tendering shares of Stock to the Company (by either actual
delivery or by attestation) or by withholding shares of Stock, the number of
shares of Stock issued net of the shares of Stock tendered or withheld shall be
deemed delivered for purposes of determining the maximum number of shares of
Stock available for delivery under the Plan. To the extent that an Award under
the Plan is canceled, expired, forfeited, settled in cash, settled by issuance
of fewer shares than the number underlying the Award, or otherwise terminated
without delivery of shares to the Grantee, the shares retained by or returned to
the Company will be available under the Plan; and shares that are withheld from
such an Award or separately surrendered by the Grantee in payment of any
exercise price or taxes relating to such an Award shall be deemed to constitute
shares not delivered to the Grantee and will be available under the Plan. In
addition, in the case of any Award granted in assumption of or in substitution
for an award of a company or business acquired by the Company or a Subsidiary or
Affiliate or with which the Company or a Subsidiary or Affiliate combines,
shares issued or issuable in connection with such substitute Award shall not be
counted against the number of shares reserved under the Plan.

    
      
         

      

      
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              5.

            	
              EFFECTIVE DATE, DURATION AND
  AMENDMENTS

            

    

     

    5.1.           Term.

     

    The Plan
shall be effective as of the Effective Date and shall terminate on the ten
(10) year anniversary of the Effective Date, and may be terminated on any
earlier date as provided in Section 5.2.

     

    5.2.           Amendment
and Termination of the Plan.

     

    The Board
may, at any time and from time to time, amend, suspend, or terminate the Plan as
to any Awards which have not been made. An amendment shall be contingent on
approval of the Company’s stockholders to the extent stated by the Board,
required by applicable law or required by applicable stock exchange listing
requirements. No Awards shall be made after termination of the Plan. No
amendment, suspension, or termination of the Plan shall, without the consent of
the Grantee, impair rights or obligations under any Award theretofore
awarded.

     

    
      	
              6.

            	
              AWARD
      ELIGIBILITY AND LIMITATIONS

            

    

     

    6.1.           Service
Providers and Other Persons.

     

    Subject
to this Section 6,
Awards may be made to any Service Provider, including any Service Provider who
is an officer or director of the Company or of any Affiliate, as the Committee
shall determine and designate from time to time in its discretion.

     

    6.2.           Successive
Awards.

     

    An
eligible person may receive more than one Award, subject to such restrictions as
are provided herein.

     

    6.3.           Stand-Alone,
Additional, Tandem, and Substitute Awards.

     

    Awards
may, in the discretion of the Committee, be granted either alone or in addition
to, in tandem with, or in substitution or exchange for, any other Award or any
award granted under another plan of the Company, any Affiliate, or any business
entity to be acquired by the Company or an Affiliate, or any other right of a
Grantee to receive payment from the Company or any Affiliate. Such additional,
tandem, and substitute or exchange Awards may be granted at any time. If an
Award is granted in substitution or exchange for another Award, the Committee
shall have the right to require the surrender of such other Award in
consideration for the grant of the new Award. The Board shall have the right, in
its discretion, to make Awards in substitution or exchange for any other award
under another plan of the Company, any Affiliate, or any business entity to be
acquired by the Company or an Affiliate. In addition, Awards may be granted in
lieu of cash compensation, including in lieu of cash amounts payable under other
plans of the Company or any Affiliate, in which the value of Stock subject to
the Award is equivalent in value to the cash compensation (for example,
Restricted Stock Units or Restricted Stock).

    
      
         

      

      
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              7.

            	
              AWARD
      AGREEMENT

            

    

     

    Each
Award shall be evidenced by an Award Agreement, in such form or forms as the
Committee shall from time to time determine.  Without limiting the
foregoing, an Award Agreement may be provided in the form of a notice which
provides that acceptance of the Award constitutes acceptance of all terms of the
Plan and the notice.  Award Agreements granted from time to time or at
the same time need not contain similar provisions but shall be consistent with
the terms of the Plan.  Each Award Agreement evidencing an Award of
Options shall specify whether such Options are intended to be Non-Qualified
Stock Options or Incentive Stock Options, and in the absence of such
specification such options shall be deemed Non-Qualified Stock
Options.

     

    
      	
              8.

            	
              TERMS
      AND CONDITIONS OF OPTIONS

            

    

     

    8.1.           Option
Price.

     

    The
Option Price of each Option shall be fixed by the Committee and stated in the
related Award Agreement. The Option Price of each Incentive Stock Option shall
be at least the Fair Market Value of a share of Stock on the Grant Date; provided, however, that
(i) in the event that a Grantee is a Ten Percent Stockholder as of the
Grant Date, the Option Price of an Option granted to such Grantee that is
intended to be an Incentive Stock Option shall be not less than 110 percent of
the Fair Market Value of a share of Stock on the Grant Date, and (ii) with
respect to Awards made in substitution for or in exchange for awards made by an
entity acquired by the Company or an Affiliate, the Option Price does not need
to be at least the Fair Market Value on the Grant Date. In no case shall the
Option Price of any Option be less than the par value of a share of
Stock.

     

    8.2.           Vesting.

     

    Subject
to Section 8.3
hereof, each Option shall become exercisable at such times and under such
conditions (including without limitation performance requirements) as shall be
determined by the Committee and stated in the Award Agreement. For purposes of
this Section 8.2,
fractional numbers of shares of Stock subject to an Option shall be rounded down
to the next nearest whole number.

     

    8.3.           Term.

     

    Each
Option shall terminate, and all rights to purchase shares of Stock thereunder
shall cease, upon the expiration of ten (10) years from the Grant
Date, or under such circumstances and on such date prior thereto as is set forth
in the Plan or as may be fixed by the Committee and stated in the related Award
Agreement (the “Termination Date”); provided, however, that in the
event that the Grantee is a Ten Percent Stockholder, an Option granted to such
Grantee that is intended to be an Incentive Stock Option at the Grant Date shall
not be exercisable after the expiration of five years from its Grant
Date.

     

    8.4.           Separation
from Service.

     

    Except as
otherwise provided in an Award Agreement, if a Grantee’s employment with or
service to the Company or Affiliate terminates for any reason other than Cause,
(i) Options granted to such Grantee, to the extent that they are exercisable at
the time of such termination, shall remain exercisable for a period of not more
than 90 days after such termination (one year in the case of termination by
reason of death or Disability), on which date they shall expire, and (ii)
Options granted to such Grantee, to the extent that they were not exercisable at
the time of such termination, shall expire on the date of such
termination.  In the event of the termination of a Grantee’s
employment or service for Cause, all outstanding Options granted to such Grantee
shall expire on the date of such termination.  Notwithstanding the
foregoing, no Option shall be exercisable after the expiration of its
term.

    
      
         

      

      
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    8.5.           Limitations
on Exercise of Option.

     

    Notwithstanding
any other provision of the Plan, in no event may any Option be exercised, in
whole or in part, (i) prior to the date the Plan is approved by the
stockholders of the Company as provided herein or (ii) after the occurrence
of an event referred to in Section 15 hereof which
results in termination of the Option.

     

    8.6.           Method
of Exercise.

     

    An Option
that is exercisable may be exercised by the Grantee’s delivery to the Company of
written notice of exercise on any business day, at the Company’s principal
office, on the form specified by the Company.  Such notice shall
specify the number of shares of Stock with respect to which the Option is being
exercised and shall be accompanied by payment in full of the Option Price of the
shares for which the Option is being exercised plus the amount (if any) of
federal and/or other taxes which the Company may, in its judgment, be required
to withhold with respect to an Award.  Except as otherwise provided by
the Committee, payments hereunder shall be made in accordance with Section 12 of
the Plan.

     

    8.7.           Rights
of Holders of Options.

     

    Unless
otherwise stated in the related Award Agreement, an individual holding or
exercising an Option shall have none of the rights of a stockholder (for
example, the right to receive cash or dividend payments or distributions
attributable to the subject shares of Stock or to direct the voting of the
subject shares of Stock ) until the shares of Stock covered thereby are fully
paid and issued to such individual.  Except as provided in Section 15 hereof, no
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date of such issuance.

     

    8.8.           Delivery
of Stock Certificates.

     

    Promptly
after the exercise of an Option by a Grantee and the payment in full of the
Option Price, such Grantee shall be entitled to the issuance of a stock
certificate or certificates evidencing his or her ownership of the shares of
Stock subject to the Option.

     

    8.9.           Transferability
of Options.

     

    Except as
provided in Section 8.10, during the
lifetime of a Grantee, only the Grantee (or, in the event of legal incapacity or
incompetence, the Grantee’s guardian or legal representative) may exercise an
Option. Except as provided in Section 8.10, no Option
shall be assignable or transferable by the Grantee to whom it is granted, other
than by will or the laws of descent and distribution.

     

    
      
         

      

      
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      8.10.        Family
Transfers.

       

    

    If
authorized in the applicable Award Agreement, a Grantee may transfer, not for
value, all or part of an Option which is not an Incentive Stock Option to any
Family Member. For the purpose of this Section 8.10, a “not for
value” transfer is a transfer which is (i) a gift, (ii) a transfer
under a domestic relations order in settlement of marital property rights; or
(iii) a transfer to an entity in which more than fifty percent of the
voting interests are owned by Family Members (or the Grantee) in exchange for an
interest in that entity. Following a transfer under this Section 8.10, any such
Option shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. Subsequent transfers of transferred
Options are prohibited except to Family Members of the original Grantee in
accordance with this Section 8.10 or by will
or the laws of descent and distribution. Notwithstanding the foregoing, the
Committee may also provide that Options may be transferred to persons other than
Family Members. The events of termination of Service of Section 8.4 hereof shall
continue to be applied with respect to the original Grantee, following which the
Option shall be exercisable by the transferee only to the extent, and for the
periods specified, in Section 8.4.

     

    8.11.        Limitations
on Incentive Stock Options.

     

    An Option
shall constitute an Incentive Stock Option only (i) if the Grantee of such
Option is an employee of the Company or any Subsidiary of the Company;
(ii) to the extent specifically provided in the related Award Agreement;
and (iii) to the extent that the aggregate Fair Market Value (determined at
the time the Option is granted) of the shares of Stock with respect to which all
Incentive Stock Options held by such Grantee become exercisable for the first
time during any calendar year (under the Plan and all other plans of the
Grantee’s employer and its Affiliates) does not exceed $100,000.  This
limitation shall be applied by taking Options into account in the order in which
they were granted.

     

    
      9.           TERMS
AND CONDITIONS OF STOCK APPRECIATION RIGHTS

    

     

    9.1.           Right
to Payment.

     

    A SAR
shall confer on the Grantee a right to receive, upon exercise thereof, the
excess of (i) the Fair Market Value of one share of Stock on the date of
exercise over (ii) the SAR Exercise Price, as determined by the Committee.
The Award Agreement for an SAR shall specify the SAR Exercise Price, which shall
be fixed on the Grant Date.  SARs may be granted alone or in
conjunction with all or part of an Option or at any subsequent time during the
term of such Option or in conjunction with all or part of any other Award. A SAR
granted in tandem with an outstanding Option following the Grant Date of such
Option may have a grant price that is equal to the Option Price.

     

    9.2.           Other
Terms.

     

    The Committee shall determine at the
Grant Date or thereafter, the time or times at which and the circumstances under
which a SAR may be exercised in whole or in part (including based on achievement
of performance goals and/or future service requirements), the time or times at
which SARs shall cease to be or become exercisable following termination of
Service or upon other conditions, the method of exercise, whether or not a SAR
shall be in tandem or in combination with any other Award, and any other terms
and conditions of any SAR.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    9.3.        Term of SARs.  The
term of a SAR granted under the Plan shall be determined by the Committee, in
its sole discretion; provided, however, that such term shall not exceed ten years.

     

    9.4.        Payment of SAR
Amount.  Upon exercise of a SAR, a Grantee shall be entitled to
receive payment from the Company in an amount determined by
multiplying:

     

    (i)   
the difference between the Fair Market Value of a Share on the date of exercise
over the SAR Exercise Price; by

    

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

    

    SARs may
be settled in cash or Stock, as determined
by the Committee and set forth in the Award Agreement.

     

    
      	
              10.

            	
              TERMS
      AND CONDITIONS OF RESTRICTED STOCK AND RESTRICTED STOCK
    UNITS

            

    

     

    10.1.       
Restrictions.

     

    At the
time of grant, the Committee may, in its sole discretion, establish a period of
time (a “restricted period”) and any additional restrictions including the
satisfaction of corporate or individual performance objectives applicable to an
Award of Restricted Stock or Restricted Stock Units in accordance with Section 13.1 and 13.2. Each Award of Restricted
Stock or Restricted Stock Units may be subject to a different restricted period
and additional restrictions. Neither Restricted Stock nor Restricted Stock Units
may be sold, transferred, assigned, pledged or otherwise encumbered or disposed
of during the restricted period or prior to the satisfaction of any other
applicable restrictions.

     

    10.2.        Restricted
Stock Certificates.

     

    The
Company shall issue stock, in the name of each Grantee to whom Restricted Stock
has been granted, stock certificates or other evidence of ownership representing
the total number of shares of Restricted Stock granted to the Grantee, as soon
as reasonably practicable after the Grant Date. The Committee may provide in an
Award Agreement that either (i) the Secretary of the Company shall hold
such certificates for the Grantee’s benefit until such time as the Restricted
Stock is forfeited to the Company or the restrictions lapse, or (ii) such
certificates shall be delivered to the Grantee, provided, however, that such
certificates shall bear a legend or legends that comply with the applicable
securities laws and regulations and makes appropriate reference to the
restrictions imposed under the Plan and the Award Agreement.

     

    10.3.        Rights
of Holders of Restricted Stock.

     

    Unless
the Committee otherwise provides in an Award Agreement, holders of Restricted
Stock shall have the right to vote such Stock and the right to receive any
dividends declared or paid with respect to such Stock. The Committee may provide
that any dividends paid on Restricted Stock must be reinvested in shares of
Stock, which may or may not be subject to the same restrictions applicable to
such Restricted Stock. All distributions, if any, received by a Grantee with
respect to Restricted Stock as a result of any stock split, stock dividend,
combination of shares, or other similar transaction shall be subject to the
restrictions applicable to the original Award.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    10.4.      Rights
of Holders of Restricted Stock Units.

     

    10.4.1.   Settlement
of Restricted Stock Units.

     

    Restricted Stock Units may be settled
in cash or Stock, as determined by the Committee and set forth in the Award
Agreement. The Award Agreement shall also set forth whether the Restricted Stock
Units shall be settled (i) within the time period specified in Section 16.9.1 for short
term deferrals or (ii) otherwise within the requirements of
Section 409A, in which case the Award Agreement shall specify upon which
events such Restricted Stock Units shall be settled.

     

    10.4.2.   Voting
and Dividend Rights.

     

    Holders
of Restricted Stock Units shall have no rights as stockholders of the Company.
The Committee may provide in an Award Agreement that the holder of such
Restricted Stock Units shall be entitled to receive, upon the Company’s payment
of a cash dividend on its outstanding Stock, a cash payment for each Restricted
Stock Unit held equal to the per-share dividend paid on the Stock, which may be
deemed reinvested in additional Restricted Stock Units at a price per unit equal
to the Fair Market Value of a share of Stock on the date that such dividend is
paid to shareholders.

     

    10.4.3.   Creditor’s
Rights.

     

    A holder
of Restricted Stock Units shall have no rights other than those of a general
creditor of the Company. Restricted Stock Units represent an unfunded and
unsecured obligation of the Company, subject to the terms and conditions of the
applicable Award Agreement.

     

    10.5.       Termination
of Service.

     

    Unless
the Committee otherwise provides in an Award Agreement or in writing after the
Award Agreement is issued, upon the termination of a Grantee’s Service, any
Restricted Stock or Restricted Stock Units held by such Grantee that have not
vested, or with respect to which all applicable restrictions and conditions have
not lapsed, shall immediately be deemed forfeited, and the Grantee shall have no
further rights with respect to such Award.

     

    10.6.        Purchase
of Restricted Stock.

     

    The
Grantee shall be required, to the extent required by applicable law, to purchase
the Restricted Stock from the Company at a Purchase Price equal to the greater
of (i) the aggregate par value of the shares of Stock represented by such
Restricted Stock or (ii) the Purchase Price, if any, specified in the
related Award Agreement. If specified in the Award Agreement, the Purchase Price
may be deemed paid by Services already rendered. The Purchase Price shall be
payable in a form described in Section 12 or, in the
discretion of the Committee, in consideration for past Services
rendered.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    10.7.       Delivery
of Stock.

     

    Upon the
expiration or termination of any restricted period and the satisfaction of any
other conditions prescribed by the Committee, the restrictions applicable to
shares of Restricted Stock or Restricted Stock Units settled in Stock shall
lapse, and, unless otherwise provided in the Award Agreement, a stock
certificate for such shares shall be delivered, free of all such restrictions,
to the Grantee or the Grantee’s beneficiary or estate, as the case may
be.

     

    
      	
              11.

            	
              TERMS
      AND CONDITIONS OF UNRESTRICTED STOCK
AWARDS

            

    

     

    The
Committee may, in its sole discretion, grant (or sell at par value or such other
higher purchase price determined by the Committee) an Award of Unrestricted
Stock to any Grantee pursuant to which such Grantee may receive shares of Stock
free of any restrictions (“Unrestricted Stock”) under the Plan. Awards of
Unrestricted Stock may be granted or sold as described in the preceding sentence
in respect of past Services rendered and other valid consideration, or in lieu
of, or in addition to, any cash compensation due to such Grantee. Unless
otherwise provided by the Committee, Awards of Unrestricted Stock shall be paid
within the time period specified in Section 16.9.1 for
short-term deferrals.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    
      	
              12.

            	
              FORM
      OF PAYMENT FOR OPTIONS AND RESTRICTED
STOCK

            

    

     

    12.1.        General
Rule.

     

    Payment
of the Option Price for the shares purchased pursuant to the exercise of an
Option or the Purchase Price for Restricted Stock shall be made in cash or in
cash equivalents acceptable to the Company, except as provided in this Section 12.

     

    12.2.        Surrender
of Stock.

     

    To the
extent the Award Agreement so provides, payment of the Option Price for shares
purchased pursuant to the exercise of an Option or the Purchase Price for
Restricted Stock may be made all or in part through the tender (including by
attestation) to the Company of unrestricted shares of Stock already owned by the
Grantee, which shares shall be valued, for purposes of determining the extent to
which the Option Price or Purchase Price has been paid thereby, at their Fair
Market Value on the date of exercise or surrender, provided that, in the case of
an Incentive Stock Option, the right to make payment in the form of
already-owned shares of Stock may be authorized only at the time of
grant.

     

    12.3.        Cashless
Exercise.

     

    With
respect to an Option only (and not with respect to Restricted Stock), to the
extent permitted by law and to the extent the Award Agreement so provides,
payment of the Option Price may be made all or in part by delivery (on a form
acceptable to the Committee) of an irrevocable direction to a licensed
securities broker acceptable to the Company to sell shares of Stock and to
deliver all or part of the sales proceeds to the Company in payment of the
Option Price and any withholding taxes described in Section 16.3.  In
addition, an Award Agreement may permit, or the Committee may allow in its
discretion, payment to be made by a “net exercise” method under which the
Company reduces the number of shares of Common Stock issued upon exercise or
settlement of an Award by the largest whole number of shares with a Fair Market
Value that does not exceed the aggregate Option Price or Purchase Price, as
applicable.

     

    12.4.        Other
Forms of Payment.

     

    To the extent the Award Agreement so
provides or the Committee may allow in its discretion, payment of the Option
Price or the Purchase Price may be made in any other form that is consistent
with applicable laws, regulations and rules.

     

    
      	
              13.

            	
              TERMS
      AND CONDITIONS OF PERFORMANCE AND ANNUAL INCENTIVE
  AWARDS

            

    

     

    13.1.        Performance
Conditions.

     

    The right
of a Grantee to exercise or receive a grant or settlement of any Award, and the
timing thereof, may be subject to such performance conditions as may be
specified by the Committee. The Committee may use such business criteria and
other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce the amounts
payable under any Award subject to performance conditions, except as limited
under Sections 13.2
hereof in the case of a Performance Award or Annual Incentive Award
intended to qualify under Code Section 162(m).

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    
      13.2.      
Performance
or Annual Incentive Awards Granted to Designated Covered Employees.

    

     

    If and to
the extent that the Committee determines that a Performance or Annual Incentive
Award to be granted to a Grantee who is designated by the Committee as likely to
be a Covered Employee should qualify as “performance-based compensation” for
purposes of Code Section 162(m), the grant, exercise and/or settlement of
such Performance or Annual Incentive Award shall be contingent upon achievement
of pre-established performance goals and other terms set forth in this Section 13.2.  The
maximum cash-based Performance or Annual Incentive Award that is intended to
qualify as “performance-based compensation” for purposes of Code
Section 162(m) awarded to any one Grantee during any calendar year shall
not exceed $500,000.

     

    13.2.1.  Performance
Goals Generally.

     

    The
performance goals for such Performance or Annual Incentive Awards shall consist
of one or more business criteria and a targeted level or levels of performance
with respect to each of such criteria, as specified by the Committee consistent
with this Section 13.2. Performance
goals shall be objective and shall otherwise meet the requirements of Code
Section 162(m) and regulations thereunder including the requirement that
the level or levels of performance targeted by the Committee result in the
achievement of performance goals being “substantially uncertain.” The Committee
may determine that such Performance or Annual Incentive Awards shall be granted,
exercised and/or settled upon achievement of any one performance goal or that
two or more of the performance goals must be achieved as a condition to grant,
exercise and/or settlement of such Performance or Annual Incentive Awards.
Performance goals may differ for Performance or Annual Incentive Awards granted
to any one Grantee or to different Grantees.

     

    13.2.2.  Business
Criteria.

     

    One or
more of the following business criteria for the Company, on a consolidated
basis, and/or specified subsidiaries or business units of the Company (except
with respect to the total stockholder return and earnings per share criteria),
shall be used exclusively by the Committee in establishing performance goals for
such Performance or Annual Incentive Awards: (i) total stockholder return;
(ii) such total stockholder return as compared to total return (on a
comparable basis) of a publicly available index such as, but not limited to, the
Standard & Poor’s 500 Stock Index; (iii) net income;
(iv) pretax earnings; (v) earnings before interest expense, taxes,
depreciation and amortization; (vi) pretax operating earnings after
interest expense and before bonuses, service fees, and extraordinary or special
items; (vii) operating margin; (viii) earnings per share;
(ix) return on equity; (x) return on capital; (xi) return on
investment; (xii) operating earnings; (xiii) working capital;
(xiv) ratio of debt to stockholders’ equity and
(xv) revenue.

     

    13.2.3.  Timing
for Establishing Performance Goals.

     

    Performance
goals shall be established not later than 90 days after the beginning of any
performance period applicable to such Performance or Annual Incentive Awards, or
at such other date as may be required or permitted for “performance-based
compensation” under Code Section 162(m).

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    13.2.4.   Settlement
of Performance or Annual Incentive Awards; Other Terms.

     

    Settlement
of such Performance or Annual Incentive Awards shall be in cash, Stock, other
Awards or other property, in the discretion of the Committee. The Committee may,
in its discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance or Annual Incentive Awards. The Committee shall
specify the circumstances in which such Performance or Annual Incentive Awards
shall be paid or forfeited in the event of termination of Service by the Grantee
prior to the end of a performance period or settlement of Performance
Awards.

     

    13.3.       Written
Determinations.

     

    All
determinations by the Committee as to the establishment of performance goals,
the amount of any Performance Award pool or potential individual Performance
Awards and as to the achievement of performance goals relating to Performance
Awards, and the amount of any Annual Incentive Award pool or potential
individual Annual Incentive Awards and the amount of final Annual Incentive
Awards, shall be made in writing in the case of any Award intended to qualify
under Code Section 162(m). To the extent permitted by Code
Section 162(m), the Committee may delegate any responsibility relating to
such Performance Awards or Annual Incentive Awards.

     

    13.4.        Status
of Section 13.2 Awards Under Code Section 162(m).

     

    It is the
intent of the Company that Performance Awards and Annual Incentive Awards under
Section 13.2 hereof
granted to persons who are designated by the Committee as likely to be Covered
Employees within the meaning of Code Section 162(m) and regulations
thereunder shall, if so designated by the Committee, constitute “qualified
performance-based compensation” within the meaning of Code Section 162(m)
and regulations thereunder. Accordingly, the terms of Section 13.2, including
the definitions of Covered Employee and other terms used therein, shall be
interpreted in a manner consistent with Code Section 162(m) and regulations
thereunder. The foregoing notwithstanding, because the Committee cannot
determine with certainty whether a given Grantee will be a Covered Employee with
respect to a fiscal year that has not yet been completed, the term Covered
Employee as used herein shall mean only a person designated by the Committee, at
the time of grant of Performance Awards or an Annual Incentive Award, as likely
to be a Covered Employee with respect to that fiscal year. If any provision of
the Plan or any agreement relating to such Performance Awards or Annual
Incentive Awards does not comply or is inconsistent with the requirements of
Code Section 162(m) or regulations thereunder, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements.

     

    13.5.        Non-Exclusive
Arrangement.

     

    The
adoption and operation of this Section 13 shall not preclude the Board or the
Committee from approving other stock- or bash-based incentive compensation
arrangements for the benefit of individuals who are Grantees hereunder as the
Board or Committee, as the case may be, deems appropriate and in the best
interests of the Company.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    
      	
              14.

            	
              REQUIREMENTS
      OF LAW

            

    

     

    14.1.       General.

     

    The
Company shall not be required to sell or issue any shares of Stock under any
Award if the sale or issuance of such shares would constitute a violation by the
Grantee, any other individual exercising an Option, or the Company of any
provision of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations. If at
any time the Company shall determine, in its discretion, that the listing,
registration or qualification of any shares subject to an Award upon any
securities exchange or under any governmental regulatory body is necessary or
desirable as a condition of, or in connection with, the issuance or purchase of
shares hereunder, no shares of Stock may be issued or sold to the Grantee or any
other individual exercising an Option pursuant to such Award unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Company, and
any delay caused thereby shall in no way affect the date of termination of the
Award. Specifically, in connection with the Securities Act, upon the exercise of
any Option or the delivery of any shares of Stock underlying an Award, unless a
registration statement under such Act is in effect with respect to the shares of
Stock covered by such Award, the Company shall not be required to sell or issue
such shares unless the Committee has received evidence satisfactory to it that
the Grantee or any other individual exercising an Option may acquire such shares
pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Committee shall be final, binding, and
conclusive. The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Securities Act. The Company shall not
be obligated to take any affirmative action in order to cause the exercise of an
Option or the issuance of shares of Stock pursuant to the Plan to comply with
any law or regulation of any governmental authority. As to any jurisdiction that
expressly imposes the requirement that an Option shall not be exercisable until
the shares of Stock covered by such Option are registered or are exempt from
registration, the exercise of such Option (under circumstances in which the laws
of such jurisdiction apply) shall be deemed conditioned upon the effectiveness
of such registration or the availability of such an exemption.

     

    14.2.        Rule
16b-3.

     

    During
any time when the Company has a class of equity security registered under
Section 12 of the Exchange Act, it is the intent of the Company that Awards
and the exercise of Options granted hereunder will qualify for the exemption
provided by Rule 16b-3 under the Exchange Act. To the extent that any provision
of the Plan or action by the Board or Committee does not comply with the
requirements of Rule 16b-3, it shall be deemed inoperative to the extent
permitted by law and deemed advisable by the Board, and shall not affect the
validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the
Board may exercise its discretion to modify this Plan in any respect necessary
to satisfy the requirements of, or to take advantage of any features of, the
revised exemption or its replacement.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      	
              15.

            	
              EFFECT
      OF CHANGES IN CAPITALIZATION

            

    

     

    15.1.       Changes
in Stock.

     

    If the
number of outstanding shares of Stock is increased or decreased or the shares of
Stock are changed into or exchanged for a different number or kind of shares or
other securities of the Company on account of any recapitalization,
reclassification, stock split, reverse split, combination of shares, exchange of
shares, stock dividend or other distribution payable in capital stock, or other
increase or decrease in such shares effected without receipt of consideration by
the Company occurring after the Effective Date, the number and kinds of shares
for which grants of Options and other Awards may be made under the Plan shall be
adjusted proportionately and accordingly by the Company; provided that any such
adjustment shall comply with Section 409A. In addition, the number and kind
of shares for which Awards are outstanding shall be adjusted proportionately and
accordingly so that the proportionate interest of the Grantee immediately
following such event shall, to the extent practicable, be the same as
immediately before such event. Any such adjustment in outstanding Options or
SARs shall not change the aggregate Option Price or SAR Exercise Price payable
with respect to shares that are subject to the unexercised portion of an
outstanding Option or SAR, as applicable, but shall include a corresponding
proportionate adjustment in the Option Price or SAR Exercise Price per share.
The conversion of any convertible securities of the Company shall not be treated
as an increase in shares effected without receipt of consideration.
Notwithstanding the foregoing, in the event of any distribution to the Company’s
stockholders of securities of any other entity or other assets (including an
extraordinary cash dividend but excluding a non-extraordinary dividend payable
in cash or in stock of the Company) without receipt of consideration by the
Company, the Company shall in such manner as the Company deems appropriate,
adjust (i) the number and kind of shares subject to outstanding Awards
and/or (ii) the exercise price of outstanding Options and Stock
Appreciation Rights to reflect such distribution.

     

    15.2.        Definition
of Change in Control.

     

    Unless an
Award Agreement provides for a different meaning, a “Change in Control” shall
mean the occurrence of any of the following:

     

    
      
        	
              	
                (i)

              	
                Any
      ‘person’ (as such term is used in Sections 13(d) and 14(d) of the Exchange
      Act) becomes the ‘beneficial owner’ (as defined in Rule 13d-3 under
      the Exchange Act), directly or indirectly, of securities of the Company
      representing more than fifty percent (50%)  of the total voting power
      represented by the Company’s then-outstanding voting securities, provided, however, that a
      Change in Control shall not be deemed to occur if an employee benefit plan
      (or a trust forming a part thereof) maintained by the Company, directly or
      indirectly, becomes the beneficial owner of more than fifty percent
      (50%) of the then-outstanding voting securities of the Company after
      such acquisition; 

              

      

    

     

    
      
        	
              	
                (ii)

              	
                A
      majority of the members of the Board is replaced during any 12-month
      period commencing on the Effective Date, by directors whose appointment or
      election is not endorsed by a majority of the members of the Board prior
      to the date of the
appointment; 

              

      

    

     

    
      
        	
              	
                (iii)

              	
                The
      consummation of a merger or consolidation of the Company with any other
      corporation, other than a merger or consolidation which would result in
      (a) the voting securities of the Company outstanding immediately
      prior thereto continuing to represent (either by remaining outstanding or
      being converted into voting securities of the surviving entity) at least
      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; or (b) the directors
      of the Company immediately prior thereto continuing to represent at least
      fifty percent (50%) of the directors of the Company or such surviving
      entity immediately after such merger or consolidation;
      or 

              

      

    

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

    

    
      
        	
              	
                (iv)

              	
                The
      consummation of the sale or disposition by the Company of all or
      substantially all of the Company’s
assets.

              

      

    

     

    Notwithstanding the foregoing, if it is determined that an Award
hereunder is subject to the requirements of Section 409A, the Company will not
be deemed to have undergone a Change in Control unless the Company is deemed to
have undergone a change in control pursuant to the definition in
Section 409A. 

     

    15.3.     Effect of Change in Control;
Corporate Transactions.

     

    The
Committee shall determine the effect of a Change in Control upon Awards, and
such effect may be set forth in the appropriate Award Agreement. Unless an Award
Agreement explicitly provides otherwise, if the Company is to be consolidated
with or acquired by another entity in a merger, sale of all or substantially all
of the Company’s assets other than a transaction to merely change the state of
incorporation (a “Corporate Transaction”), the Committee or the board of
directors of any entity assuming the obligations of the Company hereunder (the
“Successor Board”), shall, as to outstanding Options and/or SARs, either
(i) make appropriate provision for the continuation of such Options and/or
SARs by substituting on an equitable basis for the Shares then subject to such
Options and/or SARs either the consideration payable with respect to the
outstanding shares of Common Stock in connection with the Corporate Transaction
or securities of any successor or acquiring entity; or (ii) upon written
notice to the Grantees, provide that all Options and/or SARs must be exercised
(either to the extent then exercisable or, at the discretion of the Committee
or, upon a change of control of the Company, all Options and/or SARs being made
fully exercisable for purposes of this Section 15.3), within a specified number
of days of the date of such notice, at the end of which period the Options
and/or SARs shall terminate; or (iii) terminate all Options and/or SARs in
exchange for a cash payment equal to the excess of the Fair Market Value of the
Shares subject to such Options and/or SARs (either to the extent then
exercisable or, at the discretion of the Committee, all Options and/or SARs
being made fully exercisable for purposes of this Section 15.3) over the
exercise price thereof.

     

    Unless an
Award Agreement explicitly provides otherwise, with respect to outstanding
grants of Restricted Stock, Restricted Stock Units and/or Unrestricted Stock,
the Committee or the Successor Board, shall either (i) make appropriate
provisions for the continuation of such grants of Restricted Stock, Restricted
Stock Units and/or Unrestricted Stock by substituting on an equitable basis for
the Shares then subject to such Restricted Stock, Restricted Stock Units and/or
Unrestricted Stock either the consideration payable with respect to the
outstanding Shares of Common Stock in connection with the Corporate Transaction
or securities of any successor or acquiring entity; or (ii) upon written notice
to the Grantees, provide that all grants of Restricted Stock, Restricted Stock
Units and/or Unrestricted Stock must be accepted (to the extent then subject to
acceptance) within a specified number of days of the date of such notice, at the
end of which period the offer of the Restricted Stock, Restricted Stock Units
and/or Unrestricted Stock shall terminate; or (iii) terminate all grants of
Restricted Stock, Restricted Stock Units and/or Unrestricted Stock in exchange
for a cash payment equal to the excess of the Fair Market Value of the Shares
subject to such Restricted Stock, Restricted Stock Units and/or Unrestricted
Stock over the purchase price thereof, if any. In addition, in the event of a
Corporate Transaction, the Administrator may waive any or all Company repurchase
rights with respect to outstanding Restricted Stock and/or Restricted Stock
Units.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

      
15.4.     Reorganization Which Does Not Constitute a
Change in Control.

     

    If the
Company undergoes any reorganization, merger, or consolidation of the Company
with one or more other entities which does not constitute a Change in Control,
any Option or SAR theretofore granted pursuant to the Plan shall pertain to and
apply to the securities to which a holder of the number of shares of Stock
subject to such Option or SAR would have been entitled immediately following
such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the Option Price or SAR Exercise Price per share so
that the aggregate Option Price or SAR Exercise Price thereafter shall be the
same as the aggregate Option Price or SAR Exercise Price of the shares remaining
subject to the Option or SAR immediately prior to such reorganization, merger,
or consolidation. Subject to any contrary language in an Award Agreement, any
restrictions applicable to such Award shall apply as well to any replacement
shares received by the Grantee as a result of the reorganization, merger or
consolidation.

     

      
15.5.     Adjustments.

     

    Adjustments
under this Section 15 related to
shares of Stock or securities of the Company shall be made by the Committee,
whose determination in that respect shall be final, binding and conclusive. No
fractional shares or other securities shall be issued pursuant to any such
adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole
share.

     

      
15.6.     No Limitations on Company.

     

    The
making of Awards pursuant to the Plan shall not affect or limit in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations, or changes of its capital or business structure or to merge,
consolidate, dissolve, or liquidate, or to sell or transfer all or any part of
its business or assets.

     

    16.       
GENERAL PROVISIONS

     

     
16.1.     Disclaimer of Rights.

     

    No
provision in the Plan or in any Award Agreement shall be construed to confer
upon any individual the right to remain in the employ or service of the Company
or any Affiliate, or to interfere in any way with any contractual or other right
or authority of the Company either to increase or decrease the compensation or
other payments to any individual at any time, or to terminate any employment or
other relationship between any individual and the Company. In addition,
notwithstanding anything contained in the Plan to the contrary, unless otherwise
stated in the applicable Award Agreement, no Award granted under the Plan shall
be affected by any change of duties or position of the Grantee, so long as such
Grantee continues to be a Service Provider, if applicable. The obligation of the
Company to pay any benefits pursuant to this Plan shall be interpreted as a
contractual obligation to pay only those amounts described herein, in the manner
and under the conditions prescribed herein. The Plan shall in no way be
interpreted to require the Company to transfer any amounts to a third party
trustee or otherwise hold any amounts in trust or escrow for payment to any
Grantee or beneficiary under the terms of the Plan.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

     
16.2.     Nonexclusivity of the
Plan.

     

    Neither
the adoption of the Plan nor the submission of the Plan to the stockholders of
the Company for approval shall be construed as creating any limitations upon the
right and authority of the Board to adopt such other incentive compensation
arrangements (which arrangements may be applicable either generally to a class
or classes of individuals or specifically to a particular individual or
particular individuals), including, without limitation, the granting of stock
options as the Board in its discretion determines desirable.

     

      16.3.    
Withholding
Taxes.

     

    The
Company or an Affiliate, as the case may be, shall have the right to deduct from
payments of any kind otherwise due to a Grantee any federal, state, local or
other taxes of any kind required by law to be withheld (i) with respect to
the vesting of or other lapse of restrictions applicable to an Award,
(ii) upon the issuance of any shares of Stock upon the exercise of an
Option, or (iii) pursuant to an Award. At the time of such vesting, lapse,
or exercise, the Grantee shall pay to the Company or the Affiliate, as the case
may be, any amount that the Company or the Affiliate may reasonably determine to
be necessary to satisfy such withholding obligation. Subject to the prior
approval of the Company or the Affiliate, which may be withheld by the Company
or the Affiliate, as the case may be, in its sole discretion, the Grantee may
elect to satisfy such obligations, in whole or in part, (i) by causing the
Company or the Affiliate to withhold shares of Stock otherwise issuable to the
Grantee or (ii) by delivering to the Company or the Affiliate shares of
Stock already owned by the Grantee. The shares of Stock so delivered or withheld
shall have an aggregate Fair Market Value equal to such withholding obligations.
The Fair Market Value of the shares of Stock used to satisfy such withholding
obligation shall be determined by the Company or the Affiliate as of the date
that the amount of tax to be withheld is to be determined. A Grantee who has
made an election pursuant to this Section 16.3 may satisfy
his or her withholding obligation only with shares of Stock that are not subject
to any repurchase, forfeiture, unfulfilled vesting, or other similar
requirements.

     

      16.4.    
Captions.

     

    The use
of captions in this Plan or any Award Agreement is for the convenience of
reference only and shall not affect the meaning of any provision of the Plan or
any Award Agreement.

     

      16.5.   
Other
Provisions.

     

    Each
Award Agreement may contain such other terms and conditions not inconsistent
with the Plan as may be determined by the Committee, in its sole
discretion.

     

      16.6.    
Number and
Gender.

     

    With
respect to words used in this Plan, the singular form shall include the plural
form, the masculine gender shall include the feminine gender, etc., as the
context requires.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

       
16.7.     Severability.

     

    If any
provision of the Plan or any Award Agreement shall be determined to be illegal
or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.

     

       
16.8.     Governing Law.

     

    The
validity and construction of this Plan and the instruments evidencing the Awards
hereunder shall be governed by the laws of the State of Delaware, without regard
to any choice of law principles thereof or of any other
jurisdiction.

     

       
16.9.     Section 409A.

     

                   
            16.9.1.  Short-Term
Deferrals.

     

    For each
Award intended to comply with the short-term deferral exception provided for
under Section 409A, the related Award Agreement shall provide that such
Award shall be paid out by the later of (i) the 15th day of
the third month following the Grantee’s first taxable year in which the Award is
no longer subject to a substantial risk of forfeiture or (ii) the 15th day of
the third month following the end of the Company’s first taxable year in which
the Award is no longer subject to a substantial risk of forfeiture.

     

     
  16.9.2.  Adjustments.

     

    To the
extent that the Board determines that a Grantee would be subject to the
additional 20% tax imposed on certain deferred compensation arrangements
pursuant to Section 409A as a result of any provision of any Award, to the
extent permitted by Section 409A, such provision shall be deemed amended to
the minimum extent necessary to avoid application of such additional tax. The
Board shall determine the nature and scope of such amendment.

     

     
  16.10.   Foreign Qualified Awards.

     

    Awards
under the Plan may be granted to such Service Providers of the Company and its
Affiliates who are residing in countries or jurisdictions other than the United
States of America as the Committee in its sole discretion may determine from
time to time. The Committee may adopt such supplements to the Plan as may be
necessary or appropriate to comply with the applicable laws of such country or
jurisdiction and to afford Grantees favorable treatment under such
laws.

     

       
16.11.    Stockholder Approval; Effective Date of
Plan.

     

    The Plan
shall be effective as of May 4, 2010, the date of its approval by the Board (the
"Effective Date"), subject to approval by the Company’s stockholders. No award
that is intended to qualify as performance-based compensation within the meaning
of section 162(m) of the Code shall be effective unless and until the Plan is
approved by the stockholders of the Company.

     

    
      
         

      

      
        22EXHIBIT
4.3

     

    WARWICK
VALLEY TELEPHONE COMPANY

     

    2008
LONG-TERM INCENTIVE PLAN

     

    
      	
              1.

            	
              Purpose

            

    

     

    The
purpose of the Warwick Valley Telephone Company 2008 Long-Term Incentive Plan
(the “Plan”) is to assist the Company and its Affiliates in attracting,
motivating and retaining selected individuals to serve as employees, directors,
consultants and advisors of the Company and its Affiliates by providing
incentives to such individuals through the ownership and performance of the
Company’s common stock.

     

    
      	
              2.

            	
              Definitions

            

    

     

    (a)           “Affiliate” means any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the relevant time each of the corporations
other than the last corporation in the unbroken chain owns stock possessing 50
percent or more of the total combined voting power of all classes of stock in
one of the other corporations in the chain.

     

    (b)          “Award” means an
Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award or Performance Award granted under the Plan.

     

    (c)           “Award Agreement”
means the document or agreement evidencing the grant of an Award by the
Company.

     

    (d)          “Board” means the
board of directors of the Company.

     

    (e)           “Code” means the
Internal Revenue Code of 1986, as amended from time to time.

     

    (f)           “Committee” means the
Compensation Committee of the Board or any successor committee of the Board
designated by the Board to administer the Plan.  The Committee shall
consist of not less than such number of Directors as shall be required to permit
Awards granted under the Plan to qualify under Rule 16b-3 of the Exchange
Act.  Each member of the Committee shall be (i) a “non-employee
director” within the meaning of Rule 16b-3 of the Exchange Act, (ii) an “outside
director” within the meaning of Section 162(m) of the Code, and (iii) an
“independent director” for purpose of the NASDAQ rules and
regulations.

     

    (g)           “Company” means
Warwick Valley Telephone Company, a New York corporation.

     

    (h)          “Covered Employee”
means an employee of the Company or its Affiliates who is a “covered employee”
within the meaning of Section 162(m) of the Code.

     

    (i)  
         “Director” means a
non-employee member of the Board.

     

    (j)    
       “Eligible Person”
means any employee, Director, consultant or advisor providing services to the
Company or an Affiliate whom the Committee determines to be an Eligible
Person.  An Eligible Person must be an individual.

     

    (k)           “Exchange Act” means
the Securities Exchange Act of 1934, as amended from time to time.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (l)       
    “Fair Market Value”
means, with respect to any property other than Shares, the market value of such
property determined by such methods or procedures as established from time to
time by the Committee.  The Fair Market Value of Shares as of any date
shall be the per Share closing price of the Shares as reported on NASDAQ on that
date (or if there were no reported prices on such date, on the last preceding
date on which the prices were reported) or, if the Company is not then listed on
NASDAQ, on such other principal securities exchange on which the Shares are
traded, and if the Company is not listed on NASDAQ or any other securities
exchange, the Fair Market Value of Shares shall be determined by the Committee
in its sole discretion using appropriate criteria.

     

    (m)          “Incentive Stock
Option” means a stock option granted under Section 5 that is intended to
meet the requirements of Section 422 of the Code.

     

    (n)           “Limitations” has the
meaning set forth in Section 9(e).

     

    (o)           “Non-Qualified Stock
Option” means a stock option granted under Section 5 that is not intended
to be an Incentive Stock Option

     

    (p)           “Option” means an
Incentive Stock Option or a Non-Qualified Stock Option.

     

    (q)           “Participant” means an
Eligible Person who receives an Award under the Plan.

     

    (r)           “Performance Award”
means any Award of Performance Cash or Performance Shares granted pursuant to
Section 8.

     

    (s)           “Performance Cash”
means any cash incentives granted pursuant to Section 8 that will be paid to the
Participant upon the achievement of such performance goals as the Committee
shall establish.

     

    (t)           “Performance Period”
means that period established by the Committee during which any performance
goals specified by the Committee with respect to such Award are to be
measured.

     

    (u)          “Performance Share”
means any grant pursuant to Section 8 of a unit valued by reference to a
designated number of Shares, which value will be paid to the Participant upon
achievement of such performance goals as the Committee shall
establish.

     

    (v)          “Restricted Stock”
means any Share issued with the restriction that the holder may not sell,
transfer, pledge or assign such Share and with such other restrictions as the
Committee, in its sole discretion, may impose (including any restriction on the
right to vote such Share and the right to receive any dividends).

     

    (w)          “Restricted Stock
Unit” means an Award that is valued by reference to a Share, which value
may be paid to the Participant by delivery of such property as the Committee
shall determine, including without limitation, cash or Shares, or any
combination thereof, and that has such restrictions as the Committee, in its
sole discretion, may impose.

     

    (x)           “Shares” means the
shares of common stock of the Company, par value $0.01 per share.

     

    (y)          “Stock Appreciation
Right” means the right granted to a Participant pursuant to Section
6.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (z)           “Substitute Awards”
means Awards granted or Shares issued by the Company in assumption of, or in
substitution or exchange for, awards previously granted, or the right or
obligation to make future awards, in each case by a company acquired by the
Company or any Affiliate or with which the Company or any Affiliate
combines.

     

    (aa)         “Vesting Period” has
the meaning set forth in Section 7(a).

     

    
      	
              3.

            	
              Available
      Shares

            

    

     

    (a)           Aggregate Shares
Available.  Subject to adjustment as provided in
Section 11(b), a total of 500,000 Shares shall be authorized for issuance
under the Plan.  Shares to be issued under the Plan may be either
authorized but unissued Shares, or Shares that have been reacquired by the
Company and designated as treasury shares.

     

    (b)           Accounting for
Awards.

     

    (i)           For
purposes of this Section 3, if an Award entitles the holder thereof to receive
or purchase Shares, the number of Shares covered by such Award or to which such
Award relates shall be counted on the date of grant of such Award against the
aggregate number of Shares available for granting Awards under the
Plan.

     

    (ii)          If
any Shares subject to an Award are forfeited, expire or otherwise terminate
without issuance of such Shares, or any Award is settled for cash or otherwise
does not result in the issuance of all or a portion of the Shares subject to
such Award, such Shares shall, to the extent of such forfeiture, expiration,
termination, cash settlement or non-issuance, again be available for issuance
under the Plan; provided, however, in the case of a Stock Appreciation Right,
the number of shares available for issuance under the Plan shall be reduced by
the number of Shares underlying the Stock Appreciation Right, and not just the
Shares actually issued upon the exercise of the Stock Appreciation
Right.

     

    (iii)         In
the event that (1) any Option or other Award granted hereunder is exercised
through the tendering of Shares (either actually or by attestation) or by the
withholding of Shares by the Company, or (2) withholding tax liabilities arising
from such Option or other Award are satisfied by the tendering of Shares (either
actually or by attestation) or by the withholding of Shares by the Company, then
the Shares so tendered or withheld shall be available for issuance under the
Plan.

     

    (c)           Plan Limitation on
Restricted Stock and Restricted Stock Units.  Subject to
adjustment as provided in Section 11(b), no more than 200,000 Shares shall
be available under the Plan for issuance pursuant to grants of Restricted Stock
and Restricted Stock Units; provided, however, that if any Awards of Restricted
Stock Units terminate or are forfeited or cancelled without the issuance of any
Shares or if the Shares underlying an Award of Restricted Stock are forfeited or
otherwise reacquired by the Company prior to vesting, then the Shares subject to
such termination, forfeiture, cancellation or reacquisition by the Company shall
again be available for grants of Restricted Stock and Restricted Stock Units for
purposes of this limitation on grants of such Awards.

     

    
      	
              4.

            	
              Eligibility
      and Administration

            

    

     

    (a)           Eligibility.  Any
Eligible Person shall be eligible to be designated a Participant.  In
determining which Eligible Persons shall receive an Award and the terms of any
Award, the Committee may take into account the nature of the services rendered
by the respective Eligible Persons, their present and potential contributions to
the success of the Company or such other factors as the Committee, in its
discretion, shall deem relevant.  Notwithstanding the foregoing, an
Incentive Stock Option may only be granted to an employee and an Incentive Stock
Option may not be granted to an employee of an Affiliate unless such Affiliate
is also a “subsidiary corporation” of the Company within the meaning of Section
424(f) of the Code.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (b)           Administration.

     

    (i)           The
Plan shall be administered by the Committee.  The Committee shall have
full power and authority, subject to the provisions of the Plan to:
(1) select the Eligible Persons to receive Awards; (2) determine the
type or types of Awards, not inconsistent with the provisions of the Plan, to be
granted to each Participant; (3) determine the number of Shares to be
covered by each Award; (4) determine the terms and conditions, not
inconsistent with the provisions of the Plan, of any Award; (5) determine
whether, to what extent and under what circumstances Awards may be settled in
cash, Shares or other property; (6) determine whether, to what extent and
under what circumstances any Award shall be canceled or suspended;
(7) interpret and administer the Plan and any Award Agreement; (8) correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent that the Committee shall deem
desirable to carry it into effect; (9) establish such rules and regulations
and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; (10) determine whether any Award (other than an
Option or Stock Appreciation Right) will have dividend equivalents; and
(11) make any other determination and take any other action that the
Committee deems necessary or desirable for administration of the
Plan.  Decisions of the Committee shall be final, conclusive and
binding on all persons or entities, including the Company, any Participant, and
any Affiliate.  Notwithstanding the foregoing, any action or
determination by the Committee specifically affecting or relating to an Award to
a director shall require the prior approval of the Board.

     

    (ii)           Other
than pursuant to Section 11(b), the Committee may not, without the approval of
the Company’s shareholders, (a) lower the exercise price of an Option or the
strike price of a Stock Appreciation Right after it is granted, (b) cancel
an Option or Stock Appreciation Right in exchange for cash or another Award
(other than in connection with Substitute Awards), or (c) take any other action
with respect to an Option or Stock Appreciation Right that would be treated as a
repricing under the NASDAQ rules and regulations.

     

    (iii)         The
Committee may delegate its powers and duties under the Plan to one or more
directors (including a director who is also an officer of the Company) or a
committee of directors, subject to such terms, conditions and limitations as the
Committee may establish in its sole discretion; provided, however, that the
Committee shall not delegate its powers and duties under the Plan (1) with
regard to officers or directors of the Company or any Affiliate who are subject
to Section 16 of the Exchange Act or (2) in such a manner as would cause the
Plan not to comply with the requirements of Section 162(m) of the
Code.  In addition, the Committee may authorize one or more officers
of the Company to grant Awards under the Plan, to the extent permitted by
applicable law; provided, however, that such officers shall not be authorized to
grant Awards to officers or directors of the Company or any Affiliate who are
subject to Section 16 of the Exchange Act.

     

    (iv)         Notwithstanding
anything to the contrary contained herein, the Board may, at any time and from
time to time, without any further action of the Committee, exercise the powers
and duties of the Committee under the Plan, unless the exercise of such powers
and duties by the Board would cause the Plan not to comply with the requirements
of Section 162(m) of the Code, Section 16 of the Exchange Act, the NASDAQ rules
and regulations or other pertinent laws.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
              5.

            	
              Options

            

    

     

    (a)           Grant.  Options
may be granted hereunder to Participants either alone or in addition to other
Awards granted under the Plan.  Any Option shall be subject to the
terms and conditions of this Section and to such additional terms and
conditions, not inconsistent with the provisions of the Plan, as the Committee
shall deem desirable.  The receipt of an Option pursuant to the Plan
shall impose no obligation on the recipient to exercise such
Option.

     

    (b)          Exercise
Price.  Other than in connection with Substitute Awards, the
exercise price per Share of each Option shall not be less than 100 percent of
the Fair Market Value of one Share on the date of grant of such
Option.

     

    (c)           Term.  The
term of each Option shall be fixed by the Committee in its sole discretion;
provided that no Option shall be exercisable after the expiration of ten years
from the date the Option is granted.

     

    (d)           Exercise.

     

    (i)           Vested
Options granted under the Plan shall be exercised by the Participant (or by the
Participant’s executors, administrators, guardian or legal representative, as
may be provided in an Award Agreement) as to all or part of the Shares covered
thereby, by giving notice of exercise to the Company or its designated agent,
specifying the number of Shares to be purchased.  The notice of
exercise shall be in such form, made in such manner, and in compliance with such
other requirements consistent with the provisions of the Plan as the Committee
may prescribe from time to time.

     

    (ii)          Unless
otherwise provided in an Award Agreement, full payment of an Option’s exercise
price shall be made at the time of exercise and shall be made (1) in cash or
cash equivalents (including certified check or bank check or wire transfer of
immediately available funds), (2) by tendering previously acquired Shares
(either actually or by attestation, valued at their then Fair Market Value), (3)
with the consent of the Committee, by withholding Shares otherwise issuable in
connection with the exercise of the Option, (4) through any other method
specified in an Award Agreement, or (5) any combination of any of the
foregoing.  The notice of exercise, accompanied by such payment, shall
be delivered to the Company at its principal business office or such other
office as the Committee may from time to time direct, and shall be in such form,
containing such further provisions consistent with the provisions of the Plan,
as the Committee may from time to time prescribe.  In no event may any
Option be exercised for a fraction of a Share.  No adjustment shall be
made for cash dividends or other rights for which the record date is prior to
the date of such issuance.  Except for Substitute Awards, or as may be
set forth in an Award Agreement with respect to the retirement, death or
disability of a Participant or a change of control of the Company, Options
granted to employees of the Company or any Affiliate will not be exercisable
before the expiration of one year from the date the Option is granted (but may
become exercisable pro rata over such time).

     

    (e)           Incentive Stock
Options.  The Committee may grant Incentive Stock Options to
any employee of the Company or any Affiliate, subject to the requirements of
Section 422 of the Code.  Solely for purposes of determining whether
Shares are available for the grant of Incentive Stock Options under the Plan,
the maximum aggregate number of Shares that may be issued pursuant to “incentive
stock options” granted under the Plan shall be 500,000 Shares, subject to
adjustments provided in Section 11(b).

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      	
              6.

            	
              Stock
      Appreciation Rights

            

    

     

    (a)           Grant.  Stock
Appreciation Rights may be granted hereunder to Participants in conjunction with
all or part of any Option granted under the Plan, or at any subsequent time
during the term of such Option, or without regard to any Option, in each case
upon such terms and conditions as the Committee may establish in its sole
discretion.  The receipt of a Stock Appreciation Right pursuant to the
Plan shall impose no obligation on the recipient to exercise such Stock
Appreciation Right.

     

    (b)           Strike
Price.  Other than in connection with Substitute Awards, the
strike price per Share of any Stock Appreciation Right shall not be less than
100 percent of the Fair Market Value of one Share on the date of grant of such
Stock Appreciation Right.

     

    (c)           Term.  The
term of each Stock Appreciation Right shall be fixed by the Committee in its
sole discretion; provided that no Stock Appreciation Right shall be exercisable
after the expiration of ten years from the date the Stock Appreciation Right is
granted.

     

    (d)           Exercise.

     

    (i)           Except
for Substitute Awards, or as may be set forth in an Award Agreement with respect
to the retirement, death or disability of a Participant or a change of control
of the Company, Stock Appreciation Rights granted to employees of the Company or
any Affiliate will not be exercisable before the expiration of one year from the
date the Stock Appreciation Right is granted (but may become exercisable pro
rata over such time).

     

    (ii)          Vested
Stock Appreciation Rights granted under the Plan shall be exercised by the
Participant (or by the Participant’s executors, administrators, guardian or
legal representative, as may be provided in an Award Agreement) as to all or
part of the Shares covered thereby, by giving notice of exercise to the Company
or its designated agent, specifying the number of Shares so
exercised.  The notice of exercise shall be in such form, made in such
manner, and in compliance with such other requirements consistent with the
provisions of the Plan as the Committee may prescribe from time to
time.

     

    (iii)         Upon
the exercise of a Stock Appreciation Right, the holder shall have the right to
receive with respect to each Share so exercised the excess of the Fair
Market Value of one Share on the date of exercise over the per-Share strike
price of the Stock Appreciation Right.  Upon the exercise of a Stock
Appreciation Right, the Committee shall determine in its sole discretion whether
payment shall be made in cash, in whole Shares or other property, or any
combination thereof.

     

    
      	
              7.

            	
              Restricted
      Stock and Restricted Stock Units

            

    

     

    (a)           Grant.  Awards
of Restricted Stock and of Restricted Stock Units may be issued to Participants
either alone or in addition to other Awards granted under the Plan, and such
Restricted Stock Awards and Restricted Stock Unit Awards shall also be available
as a form of payment of Performance Awards and other earned cash-based incentive
compensation.  A Restricted Stock Award or Restricted Stock Unit Award
shall be subject to vesting restrictions imposed by the Committee covering a
period of time specified by the Committee (the “Vesting
Period”).   The Committee has absolute discretion to determine
whether any consideration (other than services) is to be received by the Company
or any Affiliate as a condition precedent to the issuance of Restricted Stock or
Restricted Stock Units.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    (b)           Rights of Holders of
Restricted Stock.  Unless otherwise provided in the Award
Agreement, beginning on the date of grant of the Restricted Stock Award, 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 the right to vote such Shares and the right to receive
distributions made with respect to such Shares.  Except as otherwise
provided in an Award Agreement, any Shares or any other property (other than
cash) distributed as a dividend or otherwise with respect to any Restricted
Stock Award as to which the restrictions have not yet lapsed shall be subject to
the same restrictions as such Restricted Stock Award.

     

    (c)           Rights of Holders of
Restricted Stock Units.  A Participant receiving a Restricted
Stock Unit Award shall not possess voting rights or the right to receive cash
dividends with respect to such Award.  Except as otherwise provided in
an Award Agreement, any Shares or any other property (other than cash)
distributed as a dividend or otherwise with respect to any Restricted Stock Unit
Award as to which the restrictions have not yet lapsed shall be subject to the
same restrictions as such Restricted Stock Unit Award.

     

    (d)           Minimum Vesting
Period.  Except for Substitute Awards, or as may be set forth
in an Award Agreement with respect to the retirement, death or disability of a
Participant or a change of control of the Company, or special circumstances
determined by the Committee, such as the achievement of performance objectives
(which shall have a minimum Vesting Period of one year), Restricted Stock Awards
and Restricted Stock Unit Awards subject solely to the continued employment of
employees of the Company or an Affiliate shall have a Vesting Period of not less
than three years from date of grant (but permitting pro rata vesting over such
time); provided that such restrictions shall not be applicable to (i) grants to
new hires to replace forfeited awards from a prior employer, or (ii) grants of
Restricted Stock or Restricted Stock Units in payment of Performance Awards and
other earned cash-based incentive compensation. Subject to the foregoing
minimum Vesting Period requirements, the Committee may, in its sole discretion
and subject to the limitations imposed under Section 162(m) of the Code and the
regulations thereunder in the case of a Restricted Stock Award or Restricted
Stock Unit Award intended to comply with the performance-based exception under
Section 162(m) of the Code, waive the forfeiture period and any other conditions
set forth in any Award Agreement subject to such terms and conditions as the
Committee shall deem appropriate.  The minimum Vesting Period
requirements of this Section shall not apply to Restricted Stock Awards or
Restricted Stock Unit Awards granted to directors or any consultant or advisor
who provides services to the Company or an Affiliate.

     

    
      	
              8.

            	
              Performance
      Awards

            

    

     

    (a)           Grant.  Performance
Awards in the form of Performance Cash or Performance Shares, as determined by
the Committee in its sole discretion, may be granted hereunder to Participants,
for no consideration or for such minimum consideration as may be required by
applicable law, either alone or in addition to other Awards granted under the
Plan. The performance goals to be achieved for each Performance Period shall be
conclusively determined by the Committee and may be based upon the criteria set
forth in Section 9(b).

     

    (b)           Terms and
Conditions.  The performance criteria to be achieved during any
Performance Period and the length of the Performance Period shall be determined
by the Committee upon the grant of each Performance Award; provided, however,
that a Performance Period shall not be shorter than 12 months.  The
amount of the Award to be distributed shall be conclusively determined by the
Committee.

     

    (c)           Payment.  Except
as may be provided in an Award Agreement with respect to the retirement, death
or disability of a Participant or a change of control of the Company,
Performance Awards will be distributed only after the end of the relevant
Performance Period.  Performance Awards may be paid in cash, Shares,
other property, or any combination thereof, in the sole discretion of the
Committee.  Performance Awards may be paid in a lump sum or in
installments following the close of the Performance Period or, in accordance
with procedures established by the Committee, on a deferred basis subject to the
requirements of Section 409A of the Code.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
              9.

            	
              Section
      162(m) Qualifying Performance-Based
Compensation

            

    

     

    (a)           Covered
Employees.  Notwithstanding any other provision of the Plan, if
the Committee determines at the time a Restricted Stock Award, a Restricted
Stock Unit Award or a Performance Award is granted to a Participant who is, or
is likely to be, as of the end of the tax year in which the Company would claim
a tax deduction in connection with such Award, a Covered Employee, then the
Committee may provide that this Section 9 is applicable to such
Award.

     

    (b)           Performance
Criteria. 
If the Committee determines that a Restricted Stock Award, a Restricted Stock
Unit or a Performance Award is intended to be subject to this Section 9,
the lapsing of restrictions thereon and the distribution of cash, Shares or
other property pursuant thereto, as applicable, shall be subject to the
achievement of one or more objective performance goals established by the
Committee in its sole discretion, which shall be based on the attainment of
specified levels of one or any combination of the following:  net
sales; revenue; revenue growth or product revenue growth; operating income
(before or after taxes); pre- or after-tax income (before or after allocation of
corporate overhead and bonus); earnings per share; net income (before or after
taxes); return on equity; total shareholder return; return on assets or net
assets; appreciation in and/or maintenance of the price of the Shares or any
other publicly-traded securities of the Company; market share; gross profits;
earnings (including earnings before taxes, earnings before interest and taxes or
earnings before interest, taxes, depreciation and amortization); economic
value-added models or equivalent metrics; comparisons with various stock market
indices; reductions in costs; cash flow or cash flow per share (before or after
dividends); return on capital (including return on total capital or return on
invested capital); cash flow return on investment; improvement in or attainment
of expense levels or working capital levels; operating margins, gross margins or
cash margin; year-end cash; debt reductions; shareholder equity; market share;
regulatory achievements; and implementation, completion or attainment of
measurable objectives with respect to research, development, products or
projects, production volume levels, acquisitions and divestitures and recruiting
and maintaining personnel.  Such performance goals also may be based
solely by reference to the Company’s performance or the performance of a
Affiliate, division, business segment or business unit of the Company, or based
upon the relative performance of other companies or upon comparisons of any of
the indicators of performance relative to other companies.  The
Committee may also exclude charges related to an event or occurrence which the
Committee determines should appropriately be excluded, including (1)
restructurings, discontinued operations, extraordinary items, and other unusual
or non-recurring charges, (2) an event either not directly related to the
operations of the Company or not within the reasonable control of the Company’s
management, or (3) the cumulative effects of tax or accounting changes in
accordance with US generally accepted accounting principles.  Such
performance goals shall be set by the Committee within the time period
prescribed by, and shall otherwise comply with the requirements of,
Section 162(m) of the Code and the regulations thereunder.

     

    (c)           Adjustments.  Notwithstanding
any provision of the Plan, with respect to any Restricted Stock Award,
Restricted Stock Unit Award or Performance Award that is subject to this
Section 9, the Committee may adjust downwards, but not upwards, the amount
payable pursuant to such Award, and the Committee may not waive the achievement
of the applicable performance goals, except in the case of the death or
disability of the Participant or as otherwise determined by the Committee in
special circumstances.

     

    (d)           Restrictions.  The
Committee shall have the power to impose such other restrictions on Awards
subject to this Section as it may deem necessary or appropriate to ensure
that such Awards satisfy all requirements for “performance-based compensation”
within the meaning of Section 162(m) of the Code.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (e)           Limitations on Grants to
Individual Participants.  Subject to adjustment as provided in
Section 11(b), no Participant may be granted (i) Options or Stock Appreciation
Rights during any calendar year with respect to more than 60,000 Shares or (ii)
Restricted Stock Awards, Restricted Stock Unit Awards or Performance Awards in
any calendar year that are intended to comply with the performance-based
exception under Section 162(m) of the Code and are denominated in Shares with
respect to more than 30,000 Shares (the “Limitations”).  In addition
to the foregoing, the maximum dollar value payable to any Participant in any
calendar year with respect to Performance Awards that are intended to comply
with the performance-based exception under Section 162(m) of the Code and are
denominated in cash is $2,000,000.  If an Award is cancelled, the
cancelled Award shall continue to be counted toward the applicable
Limitations.

     

    
      	
              10.

            	
              Generally
      Applicable Provisions

            

    

     

    (a)           Award
Agreements.  The terms of an Award granted under the Plan shall
be set forth in a written Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan. The terms of
Awards need not be the same with respect to each type of Award or each
Participant.

     

    (b)           Transferability of
Awards.  No Award and no Shares subject to Awards that have not
been issued or as to which any applicable restriction, performance or deferral
period has not lapsed, may be sold, assigned, transferred, pledged or otherwise
encumbered, other than by will or the laws of descent and distribution, and such
Award may be exercised during the life of the Participant only by the
Participant or the Participant’s guardian or legal representative.

     

    (c)           Termination of
Employment.  The Committee shall determine and set forth in
each Award Agreement whether any Awards granted in such Award Agreement will
continue to be exercisable, and the terms of such exercise, on and after the
date that a Participant ceases to be employed by or to provide services to the
Company or any Affiliate (including as a Director), whether by reason of death,
disability, voluntary or involuntary termination of employment or services, or
otherwise.  The date of termination of a Participant’s employment or
services will be determined by the Committee, which determination will be
final.

     

    (d)           Dividend
Equivalents.  Subject to the provisions of the Plan and any
Award Agreement, the recipient of an Award (other than an Option or Stock
Appreciation Right) may, if so determined by the Committee, be entitled to
receive, currently or on a deferred basis, cash, stock or other property
dividends, or cash payments in amounts equivalent to cash, stock or other
property dividends on Shares with respect to the number of Shares covered by the
Award, as determined by the Committee, in its sole discretion.  The
Committee may provide that any such amounts or dividend equivalents shall be
deemed to have been reinvested in additional Shares or otherwise reinvested and
may provide that any such amounts or dividend equivalents are subject to the
same vesting or performance conditions as the underlying Award.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    (e)           Tax
Withholding.  The Company shall have the right to make all
payments or distributions pursuant to the Plan to a Participant net of any
applicable federal, state and local taxes required to be paid or withheld as a
result of (i) the grant of any Award, (ii) the exercise of an Option or Stock
Appreciation Right, (iii) the delivery of Shares or cash, (iv) the lapse of any
restrictions in connection with any Award or (v) any other event occurring
pursuant to the Plan.  The Company or any Affiliate shall have the
right to withhold from wages or other amounts otherwise payable to such
Participant such withholding taxes as may be required by law, or to otherwise
require the Participant to pay such withholding taxes.  If the
Participant shall fail to make such tax payments as are required, the Company or
its Affiliates shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment of any kind otherwise due to such Participant or
to take such other action as may be necessary to satisfy such withholding
obligations.  The Committee shall be authorized to establish
procedures for election by Participants to satisfy such obligation for the
payment of such taxes by tendering previously acquired Shares (either actually
or by attestation, valued at their then Fair Market Value), or by directing the
Company to retain Shares (up to the Participant’s minimum required tax
withholding rate or such other rate that will not trigger a negative accounting
impact) otherwise deliverable in connection with the Award.

     

    
      	
              11.

            	
              Miscellaneous

            

    

     

    (a)           Amendment and Termination of
the Plan.  The Board may, from time to time, alter, amend,
suspend or terminate the Plan as it shall deem advisable, subject to any
requirement for shareholder approval imposed by applicable law, including the
rules and regulations of the principal securities market on which the Shares are
traded; provided that the Board may not amend the Plan in any manner that would
result in noncompliance with Rule 16b-3 of the Exchange Act; and further
provided that the Board may not, without the approval of the Company’s
shareholders, amend the Plan to (i) increase the number of Shares that may be
the subject of Awards under the Plan (except for adjustments pursuant to Section
11(b)), (ii) expand the types of Awards available under the Plan, (iii)
materially expand the class of persons eligible to participate in the Plan, (iv)
increase the maximum permissible term of any Option specified by Section 5(c) or
the maximum permissible term of a Stock Appreciation Right specified by Section
6(c), (v) expand the permissible performance criteria under Section 9(b), or
(vi) amend any provision of Section 3(c), Section 5(b), Section 6(b),
Section 7(d) or Section 9(e).  The Board may not, without the
approval of the Company’s shareholders, take any other action with respect to an
Option or Stock Appreciation Right that may be treated as a repricing under the
rules and regulations of the principal securities market on which the Shares are
traded, including a reduction of the exercise price of an Option or the grant
price of a Stock Appreciation Right or the exchange of an Option or Stock
Appreciation Right for cash or another Award.  In addition, no
amendments to, or termination of, the Plan shall in any way impair the rights of
a Participant under any Award previously granted without such Participant’s
consent.

     

    (b)          Adjustments.  In
the event of any merger, reorganization, consolidation, recapitalization,
dividend or distribution (whether in cash, shares or other property, other than
a regular cash dividend), stock split, reverse stock split, spin-off or similar
transaction or other change in corporate structure affecting the Shares or the
value thereof, such adjustments and other substitutions shall be made to the
Plan and to Awards as the Committee, in its sole discretion, deems equitable or
appropriate taking into consideration the accounting and tax consequences,
including such adjustments in the aggregate number, class and kind of securities
that may be delivered under the Plan, the maximum number of Shares that may be
issued as Restricted Stock Awards and Restricted Stock Unit Awards, the
Limitations, the maximum number of Shares that may be issued as Incentive Stock
Options and, in the aggregate or to any one Participant, in the number, class,
kind and exercise or strike price of securities subject to outstanding Awards
granted under the Plan (including, if the Committee deems appropriate, the
substitution of similar options to purchase the shares of, or other awards
denominated in the shares of, another company) as the Committee may determine to
be appropriate in its sole discretion; provided, however, that the number of
Shares subject to any Award shall always be a whole number.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    (c)           No Right to Awards or to
Continued Employment or Service.  Nothing in the Plan nor the
grant of an Award hereunder shall confer upon any employee or Director the right
to continue in the employment or service of the Company or any Affiliate or
affect any right that the Company or any Affiliate may have to terminate the
employment or service of (or to demote or to exclude from future Awards under
the Plan) any such employee or Director at any time for any
reason.  Except as specifically provided by the Committee, the Company
shall not be liable for the loss of existing or potential profit from an Award
granted in the event of termination of an employment or other
relationship.  No employee or Participant shall have any claim to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment of employees or Participants under the Plan.

     

    (d)           Substitute
Awards.  Notwithstanding any other provision of the Plan, the
terms of Substitute Awards may vary from the terms set forth in the Plan to the
extent the Committee deems appropriate to conform, in whole or in part, to the
provisions of the awards in substitution for which they are
granted.

     

    (e)           Cancellation of
Award.  Notwithstanding anything to the contrary contained
herein, an Award Agreement may provide that the Award shall be canceled if the
Participant, without the consent of the Company, while employed by the Company
or any Affiliate or after termination of such employment or service, establishes
a relationship with a competitor of the Company or any Affiliate or engages in
activity that is in conflict with or adverse to the interest of the Company or
any Affiliate, as determined by the Committee in its sole
discretion.  The Committee may provide in an Award Agreement that if
within the time period specified in the Agreement the Participant establishes a
relationship with a competitor or engages in an activity referred to in the
preceding sentence, the Participant will forfeit any gain realized on the
vesting or exercise of the Award and must repay such gain to the
Company.

     

    (f)           Stop Transfer
Orders.  All certificates for Shares delivered under the Plan
pursuant to any Award shall be subject to such stop-transfer orders and other
restrictions as the Committee may deem advisable under the rules, regulations
and other requirements of the Securities and Exchange Commission, any stock
exchange upon which the Shares are then listed, and any applicable federal or
state securities law, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such
restrictions.

     

    (g)           Nature of
Payments.  All Awards made pursuant to the Plan are in
consideration of services performed or to be performed for the Company or any
Affiliate, division or business unit of the Company.  Any income or
gain realized pursuant to Awards under the Plan and any Stock Appreciation
Rights constitute a special incentive payment to the Participant and shall not
be taken into account, to the extent permissible under applicable law, as
compensation for purposes of any of the employee benefit plans of the Company or
any Affiliate except as may be determined by the Committee or by the Board or
board of directors of the applicable Affiliate.

     

    (h)           Other
Plans.  Nothing contained in the Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

     

    (i)           Severability.  If
any provision of the Plan shall be held unlawful or otherwise invalid or
unenforceable in whole or in part by a court of competent jurisdiction, such
provision shall (i) be deemed limited to the extent that such court of competent
jurisdiction deems it lawful, valid and/or enforceable and as so limited shall
remain in full force and effect, and (ii) not affect any other provision of
the Plan or part thereof, each of which shall remain in full force and
effect.  If the making of any payment or the provision of any other
benefit required under the Plan shall be held unlawful or otherwise invalid or
unenforceable by a court of competent jurisdiction, such unlawfulness,
invalidity or unenforceability shall not prevent any other payment or benefit
from being made or provided under the Plan, and if the making of any payment in
full or the provision of any other benefit required under the Plan in full would
be unlawful or otherwise invalid or unenforceable, then such unlawfulness,
invalidity or unenforceability shall not prevent such payment or benefit from
being made or provided in part, to the extent that it would not be unlawful,
invalid or unenforceable, and the maximum payment or benefit that would not be
unlawful, invalid or unenforceable shall be made or provided under the
Plan.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    (j)           Unfunded Status of the
Plan.  The Plan is intended to constitute an “unfunded” plan
for incentive compensation.  With respect to any payments not yet made
to a Participant by the Company, nothing contained herein shall give any such
Participant any rights that are greater than those of a general creditor of the
Company.  In its sole discretion, the Committee may authorize the
creation of trusts or other arrangements to meet the obligations created under
the Plan to deliver the Shares or payments in lieu of or with respect to Awards
hereunder; provided, however, that the existence of such trusts or other
arrangements is consistent with the unfunded status of the Plan.

     

    (k)           Governing
Law.  The Plan and all determinations made and actions taken
thereunder, to the extent not otherwise governed by the Code or the laws of the
United States, shall be governed by the laws of the State of New York, without
reference to principles of conflict of laws, and construed
accordingly.

     

    (l)           Effective Date of Plan;
Termination of Plan.  The Plan shall be effective on the later
to occur of:  (i) the date of the approval of the Plan by the
shareholders of the Company; (ii) the approval by or consent to the Plan by
the New York Public Service Commission; (iii) the approval by or consent to the
Plan by the New Jersey Public Utilities Board; and (iv) the satisfaction by the
Company of the requirements of any other regulatory authority necessary for the
Plan to become effective.  The Plan shall be null and void and of no
effect if the foregoing conditions are not fulfilled and in such event each
Award shall, notwithstanding any of the preceding provisions of the Plan, be
null and void and of no effect.  Awards may be granted under the Plan
at any time and from time to time on or prior to the tenth anniversary of the
effective date of the Plan, on which date the Plan will expire except as to
Awards then outstanding under the Plan.  Such outstanding Awards shall
remain in effect until they have been exercised or terminated, or have
expired.

     

    (m)          Compliance with Section 409A
of the Code.  The Plan is intended to comply and shall be
administered in a manner that is intended to comply with Section 409A of the
Code and shall be construed and interpreted in accordance with such
intent.  To the extent that an Award or the payment, settlement or
deferral thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with Section
409A of the Code, including regulations or other guidance issued with respect
thereto, except as otherwise determined by the Committee. Any provision of the
Plan that would cause the grant of an Award or the payment, settlement or
deferral thereof to fail to satisfy Section 409A of the Code shall be amended to
comply with Section 409A of the Code on a timely basis, which may be made on a
retroactive basis, in accordance with regulations and other guidance issued
under Section 409A of the Code.

     

    (n)           Captions.  The
captions in the Plan are for convenience of reference only, and are not intended
to narrow, limit or affect the substance or interpretation of the provisions
contained herein.

     

    *           *           *           *           *

    
      
         

      

      
        12

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