Document:

EXHIBIT
      10.7

     

    OSAGE
      EXPLORATION AND DEVELOPMENT, INC.

     

    2007
      EQUITY-BASED COMPENSATION PLAN

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

     

    
      	
              1.

            	
              Purpose

            	
              1

            
	 	 	 	 
	
              2.

            	
              Definitions

            	
              1

            
	 	 	 	
               

            
	
              3.

            	
              Administration.

            	
              6

            
	 	
              (a)

            	
              
                Authority
                  of the Committee

              

            	
              6

            
	 	
              (b)

            	
              
                Manner
                  of Exercise of Committee
                  Authority

              

            	
              7

            
	 	
              (c)

            	
              
                Limitation
                  of Liability

              

            	
              7

            
	 	 	 	
               

            
	
              4.

            	
              Stock
                Subject to Plan.

            	
              7

            
	 	
              (a)

            	
              
                Overall
                  Number of Shares Available for
                  Delivery

              

            	
              7

            
	 	
              (b)

            	
              
                Application
                  of Limitation to Grants of
                  Awards

              

            	
              7

            
	 	
              (c)

            	
              
                Availability
                  of Shares Not Delivered under
                  Awards

              

            	
              8

            
	 	
              (d)

            	
              
                Stock
                  Offered

              

            	
              8

            
	 	 	 	
               

            
	
              5.

            	
              Eligibility;
                Per Person Award Limitations

            	
              8

            
	 	 	 	
               

            
	
              6.

            	
              Specific
                Terms of Awards.

            	
              8

            
	 	
              (a)

            	
              General

            	
              8

            
	 	
              (b)

            	
              Options

            	
              8

            
	 	
              (c)

            	
              Stock
                Appreciation Rights

            	
              9

            
	 	
              (d)

            	
              Restricted
                Stock

            	
              11

            
	 	
              (e)

            	
              Bonus
                Stock and Awards in Lieu of Obligations

            	
              12

            
	 	
              (f)

            	
              Dividend
                Equivalents

            	
              12

            
	 	
              (g)

            	
              Other
                Stock-Based Awards

            	
              12

            
	 	 	 	 
	
              7.

            	
              Certain
                Provisions Applicable to Awards.

            	
              13

            
	 	
              (a)

            	
              Stand-Alone,
                Additional, Tandem, and Substitute Awards

            	
              13

            
	 	
              (b)

            	
              Term
                of Awards

            	
              13

            
	 	
              (c)

            	
              Form
                and Timing of Payment under Awards; Deferrals

            	
              13

            
	 	
              (d)

            	
              Exemptions
                from Section 16(b) Liability

            	
              14

            
	 	
              (e)

            	
              Non-Competition
                Agreement

            	
              14

            
	 	 	 	
               

            
	
              8.

            	
              Performance
                and Annual Incentive Awards.

            	
              14

            
	 	
              (a)

            	
              Performance
                Conditions

            	
              14

            
	 	
              (b)

            	
              Performance
                Awards Granted to Designated Covered Employees

            	
              14

            
	 	
              (c)

            	
              Annual
                Incentive Awards Granted to Designated Covered Employees

            	
              16

            
	 	
              (d)

            	
              Written
                Determinations

            	
              17

            
	 	
              (e)

            	
              Status
                of Section 8(b) and Section 8(c) Awards under Section 162(m) of the
                Code

            	
              17

            
	 	 	 	
               

            
	
              9.

            	
              Recapitalization
                or Reorganization.

            	
              17

            
	 	
              (a)

            	
              Existence
                of Plans and Awards

            	
              17

            
	 	
              (b)

            	
              Subdivision
                or Consolidation of Shares

            	
              18

            
	 	
              (c)

            	
              Corporate
                Restructuring

            	
              19

            
	 	
              (d)

            	
              Change
                in Control Price

            	
              19

            
	 	
              (e)

            	
              Non-Option
                Awards

            	
              20

            
	 	
              (f)

            	
              Additional
                Issuances

            	
              20

            
	 	
              (g)

            	
              Restricted
                Stock Awards

            	
              20

            
	 	 	 	
               

            
	
              10.

            	
              General
                Provisions.

            	
              20

            
	 	
              (a)

            	
              Transferability.

            	
              20

            
	 	
              (b)

            	
              Taxes

            	
              22

            
	 	
              (c)

            	
              Changes
                to this Plan and Awards

            	
              22

            
	 	
              (d)

            	
              Limitation
                on Rights Conferred under Plan

            	
              22

            
	 	
              (e)

            	
              Unfunded
                Status of Awards

            	
              23

            
	 	
              (f)

            	
              Nonexclusivity
                of this Plan

            	
              23

            
	 	
              (g)

            	
              Payments
                in the Event of Forfeitures; Fractional Shares

            	
              23

            
	 	
              (h)

            	
              Severability

            	
              23

            
	 	
              (i)

            	
              Governing
                Law

            	
              23

            
	 	
              (j)

            	
              Conditions
                to Delivery of Stock

            	
              24

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    OSAGE
      EXPLORATION AND DEVELOPMENT, INC.

     

    2007
      EQUITY-BASED COMPENSATION PLAN

     

    1.  Purpose.
      The
      purpose of the Osage Exploration and Development, Inc. 2007 Equity-Based
      Compensation Plan (the “Plan”) is to provide a means through which Osage
      Exploration and Development, Inc., a Delaware corporation (the “Company”), and
      its subsidiaries (including any companies it may acquire) may attract and retain
      able persons as employees, directors and consultants of the Company and to
      provide a means whereby those persons upon whom the responsibilities of the
      successful administration and management of the Company rest, and whose present
      and potential contributions to the welfare of the Company are of importance,
      can
      acquire and maintain stock ownership, or awards the value of which is tied
      to
      the performance of the Company’s stock, thereby strengthening their concern for
      the welfare of the Company and their desire to remain in its employ. A further
      purpose of this Plan is to provide such employees and directors with additional
      incentive and reward opportunities designed to enhance the profitable growth
      of
      the Company. Accordingly, this Plan primarily provides for granting Incentive
      Stock Options, options which do not constitute Incentive Stock Options,
      Restricted Stock Awards, Stock Appreciation Rights or any combination of the
      foregoing, as is best suited to the circumstances of the particular individual
      as provided herein.

     

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

     

    (a)  “Annual
      Incentive Award” means a conditional right granted to a Participant under
      Section 8(c) hereof to receive a cash payment, Stock or other Award, unless
      otherwise determined by the Committee, after the end of a specified fiscal
      year.

     

    (b)  “Award”
      means any Option, SAR (including Limited SAR), Restricted Stock Award, Stock
      granted as a bonus or in lieu of another award, Dividend Equivalent, Other
      Stock-Based Award, Performance Award or Annual Incentive Award, together with
      any other right or interest granted to a Participant under this
      Plan.

     

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

     

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

     

    (e)  “Board”
      means the Company’s Board of Directors.

     

    (f)  “Business
      Day” means any day other than a Saturday, a Sunday, or a day on which banking
      institutions in the state of Delaware are authorized or obligated by law or
      executive order to close.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g)  “Change
      in Control” means the occurrence of any of the following events:

     

    (i)  The
      agreement to acquire or a tender offer that is accepted for beneficial ownership
      (within the meaning of Rule 13d-3 promulgated under the Exchange Act) by any
      individual, entity or group (within the meaning of section 13(d)(3) or 14(d)(2)
      of the Exchange Act) (a “Person”), of 50% or more of either (x) the then
      outstanding shares of Stock (the “Outstanding Stock”) or (y) the combined voting
      power of the then outstanding voting securities of the Company entitled to
      vote
      generally in the election of directors (the “Outstanding Company Voting
      Securities”); provided, however, that for purposes of this subsection (i), the
      following acquisitions shall not constitute a Change in Control: (A)
      any
      acquisition directly from the Company, (B)
      any
      acquisition by the Company, (C)
      any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any corporation controlled by the Company,
(D)
      any
      acquisition by any corporation pursuant to a transaction which complies with
      clauses (A), (B) and (C) of paragraph (iii) below; or

     

    (ii)  Individuals
      who constitute the Incumbent Board cease for any reason to constitute at least
      a
      majority of the Board; or

     

    (iii)  Consummation
      of a reorganization, merger or consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Company or an acquisition of assets
      of
      another corporation (a “Business Combination”), in each case, unless, following
      such Business Combination, (A)
      the
      Outstanding Stock and Outstanding Company Voting Securities immediately prior
      to
      such Business Combination represent or are converted into or exchanged for
      securities which represent or are convertible into more than 50% of,
      respectively, the then outstanding shares of common stock and the combined
      voting power of the then outstanding voting securities entitled to vote
      generally in the election of directors, as the case may be, of the corporation
      resulting from such Business Combination (including, without limitation, a
      corporation which as a result of such transaction owns the Company, or all
      or
      substantially all of the Company’s assets either directly or through one or more
      subsidiaries), (B)
      no
      Person (excluding any employee benefit plan (or related trust) of the Company
      or
      the corporation resulting from such Business Combination) beneficially owns,
      directly or indirectly, 20% or more of, respectively, the then outstanding
      shares of common stock of the corporation resulting from such Business
      Combination or the combined voting power of the then outstanding voting
      securities of such corporation except to the extent that such ownership of
      the
      Company existed prior to the Business Combination and (C)
      at least
      a majority of the members of the board of directors of the corporation resulting
      from such Business Combination were members of the Incumbent Board at the time
      of the execution of the initial agreement, or of the action of the Board,
      providing for such Business Combination; or

     

    (iv)  Consummation
      of a reorganization, merger or consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Company (a “Business Combination”),
      unless, following such Business Combination, the Outstanding Stock and
      Outstanding Company Voting Securities immediately prior to such Business
      Combination represent or are converted into or exchanged for securities which
      represent or are convertible into more than 50% of, respectively, the then
      outstanding shares of common stock and the combined voting power of the then
      outstanding voting securities entitled to vote generally in the election of
      directors, as the case may be, of the corporation resulting from such Business
      Combination (including, without limitation, a corporation which as a result
      of
      such transaction owns the Company, or all or substantially all of the Company’s
      assets either directly or through one or more subsidiaries); or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (v)  Approval
      by the stockholders of the Company of a complete liquidation or dissolution
      of
      the Company.

     

    (h)  “Change
      in Control Price” means the amount calculated in accordance with Section 9 of
      this Plan.

     

    (i)  “Code”
      means the Internal Revenue Code of 1986, as amended from time to time, including
      regulations thereunder and successor provisions and regulations
      thereto.

     

    (j)  “Committee”
      means a committee of two or more directors designated by the Board to administer
      this Plan; provided, however, that, unless otherwise determined by the Board,
      the Committee shall consist solely of two or more directors, each of whom shall
      be (i) a “nonemployee director” within the meaning of Rule 16b-3 under the
      Exchange Act, and (ii) an “outside director” as defined under section 162(m) of
      the Code, unless administration of this Plan by “outside directors” is not then
      required in order to qualify for tax deductibility under section 162(m) of
      the
      Code.

     

    (k)  “Covered
      Employee” means an Eligible Person who is a Covered Employee as specified in
      Section 8(e) of this Plan.

     

    (l)  “Dividend
      Equivalent” means a right, granted to a Participant under Section 6(g), to
      receive cash, Stock, other Awards or other property equal in value to dividends
      paid with respect to a specified number of shares of Stock, or other periodic
      payments.

     

    (m)  “Effective
      Date” means June 18, 2007.

     

    (n)  “Eligible
      Person” means all officers and employees, or prospective officers and employees,
      of the Company or of any Subsidiary, and other persons who provide services
      to
      the Company or any of its Subsidiaries, including directors of the Company.
      An
      employee on leave of absence may be considered as still in the employ of the
      Company or a Subsidiary for purposes of eligibility for participation in this
      Plan.

     

    (o)  “Exchange
      Act” means the Securities Exchange Act of 1934, as amended from time to time,
      including rules thereunder and successor provisions and rules
      thereto.

     

    (p)  “Executive
      Officer” means an executive officer of the Company as defined under the Exchange
      Act.

     

    (q)  “Fair
      Market Value” means, for a particular day:

     

    (i)  if
      shares
      of Stock of the same class are listed or admitted to unlisted trading privileges
      on any national or regional securities exchange at the date of determining
      the
      Fair Market Value, then the last reported sale price, regular way, on the
      composite tape of that exchange on that business day or, if no such sale takes
      place on that business day, the average of the closing bid and asked prices,
      regular way, in either case as reported in the principal consolidated
      transaction reporting system with respect to securities listed or admitted
      to
      unlisted trading privileges on that securities exchange or, if no such closing
      prices are available for that day, the last reported sale price, regular way,
      on
      the composite tape of that exchange on the last business day before the date
      in
      question; or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  if
      shares
      of Stock of the same class are not listed or admitted to unlisted trading
      privileges as provided in subparagraph (i) and if sales prices for shares of
      Stock of the same class in the over-the-counter market are reported by the
      OTC
      Bulletin Board (“OTCBB”) as of the date of determining the Fair Market Value,
      then the last reported sales price so reported on that business day or, if
      no
      such sale takes place on that business day, the average of the high bid and
      low
      asked prices so reported or, if no such prices are available for that day,
      the
      last reported sale price so reported on the last business day before the date
      in
      question; or

     

    (iii)  if
      shares
      of Stock of the same class are not listed or admitted to unlisted trading
      privileges as provided in subparagraph (i) and sales prices for shares of Stock
      of the same class are not reported by the OTCBB (or
      a
      similar system then in use) as provided in subparagraph (ii), and if bid and
      asked prices for shares of Stock of the same class in the over-the-counter
      market are reported by OTCBB (or, if not so reported, by the National Quotation
      Bureau Incorporated) as of the date of determining the Fair Market Value, then
      the average of the high bid and low asked prices on that business day or, if
      no
      such prices are available for that day, the average of the high bid and low
      asked prices on the last business day before the date in question;
      or

     

    (iv)  if
      shares
      of Stock of the same class are not listed or admitted to unlisted trading
      privileges as provided in subparagraph (i) and sales prices or bid and asked
      prices therefor are not reported by OTCBB (or the National Quotation Bureau
      Incorporated) as provided in subparagraph (ii) or subparagraph (iii) as of
      the
      date of determining the Fair Market Value, then the value determined in good
      faith by the Committee, which determination shall be conclusive for all
      purposes; or

     

    (v)  if
      shares
      of Stock of the same class are listed or admitted to unlisted trading privileges
      as provided in subparagraph (i) or sales prices or bid and asked prices therefor
      are reported by OTCBB (or the National Quotation Bureau Incorporated) as
      provided in subparagraph (ii) or subparagraph (iii) as of the date of
      determining the Fair Market Value, but the volume of trading is so low that
      the
      Board of Directors determines in good faith that such prices are not indicative
      of the fair value of the Stock, then the value determined in good faith by
      the
      Committee, which determination shall be conclusive for all purposes
      notwithstanding the provisions of subparagraphs (i), (ii) or (iii).

     

    For
      purposes of valuing Incentive Stock Options, the Fair Market Value of Stock
      shall be determined without regard to any restriction other than one that,
      by
      its terms, will never lapse. 

     

    (r)  “Incentive
      Stock Option” or “ISO” means any Option intended to be and designated as an
      incentive stock option within the meaning of section 422 of the Code or any
      successor provision thereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (s)  “Incumbent
      Board” shall mean individuals who constitute the Board as of the Effective Date
      and any other individual who becomes a director of the Company after that date
      and whose election or appointment by the Board or nomination for election by
      the
      Company’s stockholders was approved by a vote of at least a majority of the
      directors then comprising the Incumbent Board, but excluding, for this purpose,
      any such individual whose initial assumption of office occurs as a result of
      an
      actual or threatened election contest with respect to the election or removal
      of
      directors or other actual or threatened solicitation of proxies or consents
      by
      or on behalf of a Person other than the Incumbent Board.

     

    (t)  “Limited
      SAR” means a right granted to a Participant under Section 6(c)
      hereof.

     

    (u)  “Option”
      means a right, granted to a Participant under Section 6(b) hereof, to purchase
      Stock or other Awards at a specified price during specified time
      periods.

     

    (v)  “Other
      Stock-Based Awards” means Awards granted to a Participant under Section 6(h)
      hereof.

     

    (w)  “Participant”
      means a person who has been granted an Award under this Plan which remains
      outstanding, including a person who is no longer an Eligible
      Person.

     

    (x)  “Performance
      Award” means a right, granted to a Participant under Section 8 hereof, to
      receive Awards based upon performance criteria specified by the
      Committee.

     

    (y)  “Person”
      means any person or entity of any nature whatsoever, specifically including
      an
      individual, a firm, a company, a corporation, a partnership, a limited liability
      company, a trust or other entity; a Person, together with that Person’s
      Affiliates and Associates (as those terms are defined in Rule 12b-2 under the
      Exchange Act), and any Persons acting as a partnership, limited partnership,
      joint venture, association, syndicate or other group (whether or not formally
      organized), or otherwise acting jointly or in concert or in a coordinated or
      consciously parallel manner (whether or not pursuant to any express agreement),
      for the purpose of acquiring, holding, voting or disposing of securities of
      the
      Company with such Person, shall be deemed a single “Person.”

     

    (z)  “Qualified
      Member” means a member of the Committee who is a “Non-Employee Director” within
      the meaning of Rule 16b-3(b)(3) and an “outside director” within the meaning of
      regulation 1.162-27 under section 162(m) of the Code.

     

    (aa)  “Restricted
      Stock” means Stock granted to a Participant under Section 6(d) hereof, that is
      subject to certain restrictions and to a risk of forfeiture.

     

    (bb)  “Rule
      16b-3” means Rule 16b-3, promulgated by the Securities and Exchange Commission
      under section 16 of the Exchange Act, as from time to time in effect and
      applicable to this Plan and Participants.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (cc)  “Securities
      Act” means the Securities Act of 1933 and the rules and regulations promulgated
      thereunder, or any successor law, as it may be amended from time to
      time.

     

    (dd)  “Stock”
      means the Company’s Common Stock, par value $.0001 per share, and such other
      securities as may be substituted (or resubstituted) for Stock pursuant to
      Section 9.

     

    (ee)  “Stock
      Appreciation Rights” or “SAR” means a right granted to a Participant under
      Section 6(c) hereof.

     

    (ff)  “Subsidiary”
      means with respect to any Person, any corporation or other entity of which
      a
      majority of the voting power of the voting equity securities or equity interest
      is owned, directly or indirectly, by that Person.

     

    3.  Administration.

     

    (a)  Authority
      of the Committee.
      This
      Plan shall be administered by the Committee except to the extent the Board
      elects, in order to comply with Rule 16b-3 or for any other reason, to
      administer this Plan, in which case references herein to the “Committee” shall
      be deemed to include references to the “Board.” Subject to the express
      provisions of the Plan and Rule 16b-3, the Committee shall have the authority,
      in its sole and absolute discretion, to (i) adopt,
      amend, and rescind administrative and interpretive rules and regulations
      relating to the Plan; (ii)
      determine the Eligible Persons to whom, and the time or times at which, Awards
      shall be granted; (iii)
      determine the amount of cash and the number of shares of Stock, Stock
      Appreciation Rights, or Restricted Stock Awards, or any combination thereof,
      that shall be the subject of each Award; (iv)
      determine the terms and provisions of each Award agreement (which need not
      be
      identical), including provisions defining or otherwise relating to (A)
      the term
      and the period or periods and extent of exercisability of the Options,
(B) the
      extent to which the transferability of shares of Stock issued or transferred
      pursuant to any Award is restricted, (C)
      the
      effect of termination of employment of a Participant on the Award, and
(D)
      the
      effect of approved leaves of absence (consistent with any applicable regulations
      of the Internal Revenue Service); (v)
      accelerate the time of exercisability of any Option that has been granted;
      (vi)
      construe
      the respective Award agreements and the Plan; (vii)
      make
      determinations of the Fair Market Value of the Stock pursuant to the Plan;
      (viii)
      delegate
      its duties under the Plan to such agents as it may appoint from time to time,
      provided that the Committee may not delegate its duties with respect to making
      Awards to, or otherwise with respect to Awards granted to, Eligible Persons
      who
      are subject to section 16(b) of the Exchange Act or section 162(m) of the Code;
      (ix)
      subject
      to ratification by the Board, terminate, modify, or amend the Plan; and
(x)
      make all
      other determinations, perform all other acts, and exercise all other powers
      and
      authority necessary or advisable for administering the Plan, including the
      delegation of those ministerial acts and responsibilities as the Committee
      deems
      appropriate. Subject to Rule 16b-3 and section 162(m) of the Code, the Committee
      may correct any defect, supply any omission, or reconcile any inconsistency
      in
      the Plan, in any Award, or in any Award agreement in the manner and to the
      extent it deems necessary or desirable to carry the Plan into effect, and the
      Committee shall be the sole and final judge of that necessity or desirability.
      The determinations of the Committee on the matters referred to in this Section
      3(a) shall be final and conclusive.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  Manner
      of Exercise of Committee Authority.
      At any
      time that a member of the Committee is not a Qualified Member, any action of
      the
      Committee relating to an Award granted or to be granted to a Participant who
      is
      then subject to section 16 of the Exchange Act in respect of the Company, or
      relating to an Award intended by the Committee to qualify as “performance-based
      compensation” within the meaning of section 162(m) of the Code and regulations
      thereunder, may be taken either (i)
      by a
      subcommittee, designated by the Committee, composed solely of two or more
      Qualified Members, or (ii)
      by the
      Committee but with each such member who is not a Qualified Member abstaining
      or
      recusing himself or herself from such action; provided, however, that, upon
      such
      abstention or recusal, the Committee remains composed solely of two or more
      Qualified Members. Such action, authorized by such a subcommittee or by the
      Committee upon the abstention or recusal of such non-Qualified Member(s), shall
      be the action of the Committee for purposes of this Plan. Any action of the
      Committee shall be final, conclusive and binding on all persons, including
      the
      Company, its subsidiaries, stockholders, Participants, Beneficiaries, and
      transferees under Section 10(a) hereof or other persons claiming rights from
      or
      through a Participant. The express grant of any specific power to the Committee,
      and the taking of any action by the Committee, shall not be construed as
      limiting any power or authority of the Committee. The Committee may delegate
      to
      officers or managers of the Company or any Subsidiary, or committees thereof,
      the authority, subject to such terms as the Committee shall determine, to
      perform such functions, including administrative functions, as the Committee
      may
      determine, to the extent that such delegation will not result in the loss of
      an
      exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject
      to
      section 16 of the Exchange Act in respect of the Company and will not cause
      Awards intended to qualify as “performance-based compensation” under section
      162(m) of the Code to fail to so qualify. The Committee may appoint agents
      to
      assist it in administering this Plan.

     

    (c)  Limitation
      of Liability.
      The
      Committee and each member thereof shall be entitled to, in good faith, rely
      or
      act upon any report or other information furnished to him or her by any officer
      or employee of the Company or a Subsidiary, the Company’s legal counsel,
      independent auditors, consultants or any other agents assisting in the
      administration of this Plan. Members of the Committee and any officer or
      employee of the Company or a Subsidiary acting at the direction or on behalf
      of
      the Committee shall not be personally liable for any action or determination
      taken or made in good faith with respect to this Plan, and shall, to the fullest
      extent permitted by law, be indemnified and held harmless by the Company with
      respect to any such action or determination.

     

    4.  Stock
      Subject to Plan.

     

    (a)  Overall
      Number of Shares Available for Delivery.
      Subject
      to adjustment in a manner consistent with any adjustment made pursuant to
      Section 9, the total number of shares of Stock reserved and available for
      delivery in connection with Awards under this Plan shall not exceed 5,000,000
      shares.

     

    (b)  Application
      of Limitation to Grants of Awards.
      No
      Award may be granted if (i)
      the
      number of shares of Stock to be delivered in connection with such Award exceeds
      (ii)
      the
      number of shares of Stock remaining available under this Plan minus the number
      of shares of Stock issuable in settlement of or relating to then-outstanding
      Awards. The Committee may adopt reasonable counting procedures to ensure
      appropriate counting, avoid double counting (as, for example, in the case of
      tandem or substitute awards) and make adjustments if the number of shares of
      Stock actually delivered differs from the number of shares previously counted
      in
      connection with an Award.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)  Availability
      of Shares Not Delivered under Awards.
      Shares
      of Stock subject to an Award under this Plan that expire or are canceled,
      forfeited, settled in cash or otherwise terminated without a delivery of shares
      to the Participant, including (i)
      the
      number of shares withheld in payment of any exercise or purchase price of an
      Award or taxes relating to Awards, and (ii)
      the
      number of shares surrendered in payment of any exercise or purchase price of
      an
      Award or taxes relating to any Award, will again be available for Awards under
      this Plan, except that if any such shares could not again be available for
      Awards to a particular Participant under any applicable law or regulation,
      such
      shares shall be available exclusively for Awards to Participants who are not
      subject to such limitation.

     

    (d)  Stock
      Offered.
      The
      shares to be delivered under the Plan shall be made available from (i) authorized
      but unissued shares of Stock, (ii)
      Stock
      held in the treasury of the Company, or (iii) previously
      issued shares of Stock reacquired by the Company, including shares purchased
      on
      the open market, in each situation as the Board or the Committee may determine
      from time to time at its sole option.

     

    5.  Eligibility;
      Per Person Award Limitations.
      Awards
      may be granted under this Plan only to Eligible Persons. In each fiscal year
      or
      12-month period, as applicable, during any part of which this Plan is in effect,
      a Covered Employee may not be granted (a) Awards relating to more than 1,000,000
      shares of Stock, subject to adjustment in a manner consistent with any
      adjustment made pursuant to Section 9 or (b) in the case of Awards not related
      to shares of Stock Awards with a value at the time of payment in excess of
      $100,000.

     

    6.  Specific
      Terms of Awards.

     

    (a)  General.
      Awards
      may be granted on the terms and conditions set forth in this Section 6. In
      addition, the Committee may impose on any Award or the exercise thereof, at
      the
      date of grant or thereafter (subject to Section 10(c)), such additional terms
      and conditions, not inconsistent with the provisions of this Plan, as the
      Committee shall determine, including terms requiring forfeiture of Awards in
      the
      event of termination of employment by the Participant and terms permitting
      a
      Participant to make elections relating to his or her Award. The Committee shall
      retain full power and discretion to accelerate, waive or modify, at any time,
      any term or condition of an Award that is not mandatory under this Plan;
      provided, however, that the Committee shall not have any discretion to
      accelerate, waive or modify any term or condition of an Award that is intended
      to qualify as “performance-based compensation” for purposes of section 162(m) of
      the Code if such discretion would cause the Award to not so qualify. Except
      in
      cases in which the Committee is authorized to require other forms of
      consideration under this Plan, or to the extent other forms of consideration
      must be paid to satisfy the requirements of the Delaware General Corporation
      Law, no consideration other than services may be required for the grant (but
      not
      the exercise) of any Award.

     

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

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)  Exercise
      Price.
      Each
      Option agreement shall state the exercise price per share of Stock (the
“Exercise Price”); provided, however, that the Exercise Price per share of Stock
      subject to an Incentive Stock Option shall not be less than the greater of
      (A)
      the par
      value per share of the Stock or (B)
      100% of
      the Fair Market Value per share of the Stock on the date of grant of the Option
      or in the case of an individual who owns stock possessing more than 10 percent
      of the total combined voting power of all classes of stock of the Corporation
      or
      its parent or any Subsidiary 110% of the Fair Market Value per share of the
      Stock on the date of grant, and the exercise price per share of Stock subject
      to
      an Option other than an Incentive Stock Option shall not be less than the
      greater of (A) the par value per share of the Stock or (B) 100% of the Fair
      Market Value per share of the Stock on the date of grant of the
      Option.

     

    (ii)  Time
      and Method of Exercise.
      The
      Committee shall determine the time or times at which or the circumstances under
      which an Option may be exercised in whole or in part (including based on
      achievement of performance goals and/or future service requirements), the
      methods by which such exercise price may be paid or deemed to be paid, the
      form
      of such payment, including without limitation cash, Stock, other Awards or
      awards granted under other plans of the Company or any Subsidiary, or other
      property (including notes or other contractual obligations of Participants
      to
      make payment on a deferred basis), and the methods by or forms in which Stock
      will be delivered or deemed to be delivered to Participants, including, but
      not
      limited to, the delivery of Restricted Stock subject to Section 6(d). In the
      case of an exercise whereby the Exercise Price is paid with Stock, such Stock
      shall be valued as of the date of exercise.

     

    (iii)  ISOs.
      The
      terms of any ISO granted under this Plan shall comply in all respects with
      the
      provisions of section 422 of the Code. Anything in this Plan to the contrary
      notwithstanding, no term of this Plan relating to ISOs (including any SAR in
      tandem therewith) shall be interpreted, amended or altered, nor shall any
      discretion or authority granted under this Plan be exercised, so as to
      disqualify either this Plan or any ISO under section 422 of the Code, unless
      the
      Participant has first requested the change that will result in such
      disqualification. ISOs shall not be granted more than ten years after the
      earlier of the adoption of this Plan or the approval of this Plan by the
      Company’s stockholders. Notwithstanding the foregoing, the Fair Market Value of
      shares of Stock subject to an ISO and the aggregate Fair Market Value of shares
      of stock of any parent or Subsidiary corporation (within the meaning of sections
      424(e) and (f) of the Code) subject to any other incentive stock option (within
      the meaning of section 422 of the Code)) of the Company or a parent or
      Subsidiary corporation (within the meaning of sections 424(e) and (f) of the
      Code) that first becomes purchasable by a Participant in any calendar year
      may
      not (with respect to that Participant) exceed $100,000, or such other amount
      as
      may be prescribed under section 422 of the Code or applicable regulations or
      rulings from time to time. As used in the previous sentence, Fair Market Value
      shall be determined as of the date the incentive stock option is granted.
      Failure to comply with this provision shall not impair the enforceability or
      exercisability of any Option, but shall cause the excess amount of shares to
      be
      reclassified in accordance with the Code.

     

    (c)  Stock
      Appreciation Rights.
      The
      Committee is authorized to grant SARs to Participants on the following terms
      and
      conditions: 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (i)  Right
      to Payment.
      An SAR
      shall confer on the Participant to whom it is granted a right to receive, upon
      exercise or settlement thereof, the excess of (A)
      the Fair
      Market Value of one share of Stock on the date of exercise or settlement (or,
      in
      the case of a “Limited SAR,” the Fair Market Value determined by reference to
      the Change in Control Price, as defined under Section 2(h) hereof) over
(B)
      the
      grant price of the SAR as determined by the Committee.

     

    (ii)  Rights
      Related to Options.
      A Stock
      Appreciation Right granted pursuant to an Option shall entitle a Participant,
      upon exercise or settlement, to surrender that Option or any portion thereof,
      to
      the extent unexercised or not settled, and to receive payment of an amount
      computed pursuant to Subsection 6(c)(ii)(B). That Option shall then cease to
      be
      exercisable or settleable to the extent surrendered. Stock Appreciation Rights
      granted in connection with an Option shall be subject to the terms of the Award
      agreement governing the Option, which shall comply with the following provisions
      in addition to those applicable to Options:

     

    (A)  A
      Stock
      Appreciation Right granted in connection with an Option shall be exercisable
      or
      settleable only at such time or times and only to the extent that the related
      Option is exercisable and shall not be transferable except to the extent that
      the related Option is transferable.

     

    (B)  Upon
      the
      exercise or settlement of a Stock Appreciation Right related to an Option,
      a
      Participant shall be entitled to receive payment from the Company of an amount
      determined by multiplying:

     

    (1)  the
      difference obtained by subtracting the exercise price of a share of Stock
      specified in the related Option from the Fair Market Value of a share of Stock
      on the date of exercise or settlement of the Stock Appreciation Right,
      by

     

    (2)  the
      number of shares as to which that Stock Appreciation Right has been exercised
      or
      settled.

     

    (iii)  Right
      Without Option.
      A Stock
      Appreciation Right granted independent of an Option shall be exercisable or
      settleable as determined by the Committee and set forth in the Award agreement
      governing the Stock Appreciation Right, which Award agreement shall comply
      with
      the following provisions:

     

    (A)  Each
      Award agreement shall state the total number of shares of Stock to which the
      Stock Appreciation Right relates.

     

    (B)  Each
      Award agreement shall state the time at which the Stock Appreciation Right
      will
      vest, the time the Stock Appreciation Right will be settled, or the time or
      periods in which the right to exercise the Stock Appreciation Right or a portion
      thereof shall vest and the number of shares of Stock for which the right to
      exercise the Stock Appreciation Right shall vest at each such time or
      period.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (C)  Each
      Award agreement shall state the date at which the Stock Appreciation Rights
      shall expire if not previously exercised or settled.

     

    (D)  Each
      Stock Appreciation Right shall entitle a Participant, upon exercise or
      settlement thereof, to receive payment of an amount determined by
      multiplying:

     

    (1)  the
      difference obtained by subtracting the Fair Market Value of a share of Stock
      on
      the date of grant of the Stock Appreciation Right from the Fair Market Value
      of
      a share of Stock on the date of exercise or settlement of that Stock
      Appreciation Right, by

     

    (2)  the
      number of shares as to which the Stock Appreciation Right has been exercised
      or
      settled.

     

    (iv)  Terms.
      The
      Committee shall determine at the date of grant or thereafter, the time or times
      at which and the circumstances under which an SAR may be exercised or settled
      in
      whole or in part (including based on achievement of performance goals and/or
      future service requirements), the method of exercise, method of settlement,
      form
      of consideration payable in settlement, method by or forms in which Stock will
      be delivered or deemed to be delivered to Participants, whether or not an SAR
      shall be in tandem or in combination with any other Award, and any other terms
      and conditions of any SAR. Limited SARs that may only be exercised in connection
      with a Change in Control or other event as specified by the Committee may be
      granted on such terms, not inconsistent with this Section 6(c), as the Committee
      may determine. SARs and Limited SARs may be either freestanding or in tandem
      with other Awards.

     

    (d)  Restricted
      Stock.
      The
      Committee is authorized to grant Restricted Stock to Participants on the
      following terms and conditions:

     

    (i)  Grant
      and Restrictions.
      Restricted Stock shall be subject to such restrictions on transferability,
      risk
      of forfeiture and other restrictions, if any, as the Committee may impose,
      which
      restrictions may lapse separately or in combination at such times, under such
      circumstances (including based on achievement of performance goals and/or future
      service requirements), in such installments or otherwise, as the Committee
      may
      determine at the date of grant or thereafter. Except to the extent restricted
      under the terms of this Plan and any Award agreement relating to the Restricted
      Stock, a Participant granted Restricted Stock shall have all of the rights
      of a
      stockholder, including the right to vote the Restricted Stock and the right
      to
      receive dividends thereon (subject to any mandatory reinvestment or other
      requirement imposed by the Committee). During the restricted period applicable
      to the Restricted Stock, the Restricted Stock may not be sold, transferred,
      pledged, hypothecated, margined or otherwise encumbered by the
      Participant.

     

    (ii)  Forfeiture.
      Except
      as otherwise determined by the Committee, upon termination of employment during
      the applicable restriction period, Restricted Stock that is at that time subject
      to restrictions shall be forfeited and reacquired by the Company; provided
      that
      the Committee may provide, by rule or regulation or in any Award agreement,
      or
      may determine in any individual case, that restrictions or forfeiture conditions
      relating to Restricted Stock shall be waived in whole or in part in the event
      of
      terminations resulting from specified causes, and the Committee may in other
      cases waive in whole or in part the forfeiture of Restricted Stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

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

     

    (e)  Bonus
      Stock and Awards in Lieu of Obligations.
      The
      Committee is authorized to grant Stock as a bonus, or to grant Stock or other
      Awards in lieu of obligations to pay cash or deliver other property under this
      Plan or under other plans or compensatory arrangements, provided that, in the
      case of Participants subject to section 16 of the Exchange Act, the amount
      of
      such grants remains within the discretion of the Committee to the extent
      necessary to ensure that acquisitions of Stock or other Awards are exempt from
      liability under section 16(b) of the Exchange Act. Stock or Awards granted
      hereunder shall be subject to such other terms as shall be determined by the
      Committee. In the case of any grant of Stock to an officer of the Company or
      a
      Subsidiary in lieu of salary or other cash compensation, the number of shares
      granted in place of such compensation shall be reasonable, as determined by
      the
      Committee.

     

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

     

    (g)  Other
      Stock-Based Awards.
      The
      Committee is authorized, subject to limitations under applicable law, to grant
      to Participants such other Awards that may be denominated or payable in, valued
      in whole or in part by reference to, or otherwise based on, or related to,
      Stock, as deemed by the Committee to be consistent with the purposes of this
      Plan, including without limitation convertible or exchangeable debt securities,
      other rights convertible or exchangeable into Stock, purchase rights for Stock,
      Awards with value and payment contingent upon performance of the Company or
      any
      other factors designated by the Committee, and Awards valued by reference to
      the
      book value of Stock or the value of securities of or the performance of
      specified subsidiaries. The Committee shall determine the terms and conditions
      of such Awards. Stock delivered pursuant to an Award in the nature of a purchase
      right granted under this Section 6(h) shall be purchased for such consideration,
      paid for at such times, by such methods, and in such forms, including, without
      limitation, cash, Stock, other Awards, or other property, as the Committee
      shall
      determine. Cash awards, as an element of or supplement to any other Award under
      this Plan, may also be granted pursuant to this Section 6(h).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.  Certain
      Provisions Applicable to Awards.

     

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

     

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

     

    (c)  Form
      and Timing of Payment under Awards; Deferrals.
      Subject
      to the terms of this Plan and any applicable Award agreement, payments to be
      made by the Company or a Subsidiary upon the exercise of an Option or other
      Award or settlement of an Award may be made in such forms as the Committee
      shall
      determine, including without limitation cash, Stock, other Awards or other
      property, and may be made in a single payment or transfer, in installments,
      or
      on a deferred basis. The settlement of any Award may be accelerated, and cash
      paid in lieu of Stock in connection with such settlement, in the discretion
      of
      the Committee or upon occurrence of one or more specified events (in addition
      to
      a Change in Control). Installment or deferred payments may be required by the
      Committee (subject to Section 10(c) of this Plan, including the consent
      provisions thereof in the case of any deferral of an outstanding Award not
      provided for in the original Award agreement) or permitted at the election
      of
      the Participant on terms and conditions established by the Committee. Payments
      may include, without limitation, provisions for the payment or crediting of
      reasonable interest on installment or deferred payments or the grant or
      crediting of Dividend Equivalents or other amounts in respect of installment
      or
      deferred payments denominated in Stock. Any deferral shall only be allowed
      as is
      provided in a separate deferred compensation plan adopted by the Company. This
      Plan shall not constitute an “employee benefit plan” for purposes of section
      3(3) of the Employee Retirement Income Security Act of 1974, as
      amended.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    (e)  Non-Competition
      Agreement.
      Each
      Participant to whom an Award is granted under this Plan may be required to
      agree
      in writing as a condition to the granting of such Award not to engage in conduct
      in competition with the Company or any of its subsidiaries for a period after
      the termination of such Participant’s employment with the Company and its
      subsidiaries as determined by the Committee.

     

    8.  Performance
      and Annual Incentive Awards.

     

    (a)  Performance
      Conditions.
      The
      right of a Participant 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 or increase
      the amounts payable under any Award subject to performance conditions, except
      as
      limited under Sections 8(b) and 8(c) hereof in the case of a Performance Award
      or Annual Incentive Award intended to qualify under section 162(m) of the
      Code.

     

    (b)  Performance
      Awards Granted to Designated Covered Employees.
      If the
      Committee determines that a Performance Award to be granted to an Eligible
      Person who is designated by the Committee as likely to be a Covered Employee
      should qualify as “performance-based compensation” for purposes of section
      162(m) of the Code, the grant, exercise and/or settlement of such Performance
      Award may be contingent upon achievement of preestablished performance goals
      and
      other terms set forth in this Section 8(b).

     

    (i)  Performance
      Goals Generally.
      The
      performance goals for such Performance Awards shall consist of one or more
      business criteria or individual performance 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 8(b). Performance goals shall be
      objective and shall otherwise meet the requirements of section 162(m) of the
      Code and regulations thereunder (including Treasury Regulation §1.162-27 and
      successor regulations thereto), 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 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 Awards. Performance goals may differ for Performance Awards
      granted to any one Participant or to different Participants.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  Business
      and Individual Performance Criteria

     

    (A)  Business
      Criteria.
      One
      or
      more of the following business criteria for the Company, on a consolidated
      basis, and/or for specified subsidiaries or business or geographical units
      of
      the Company (except with respect to the total stockholder return and earnings
      per share criteria), shall be used by the Committee in establishing performance
      goals for such Performance Awards: (1)
      earnings
      per share; (2)
      increase
      in revenues; (3)
      increase
      in cash flow; (4)
      increase
      in cash flow return; (5)
      return
      on net assets, return on assets, return on investment, return on capital, or
      return on equity; (6)
      economic
      value added; (7) operating
      margin or contribution margin; (8)
      net
      income; pretax earnings; pretax earnings before interest, depreciation and
      amortization; pretax operating earnings after interest expense and before
      incentives, service fees, and extraordinary or special items; or operating
      income; (9)
      total
      stockholder return; (10)
      debt
      reduction; and (11)
      any of
      the above goals determined on an absolute or relative basis or as compared
      to
      the performance of a published or special index deemed applicable by the
      Committee including, but not limited to, the Standard & Poor’s 500 Stock
      Index or a group of comparable companies. One or more of the foregoing business
      criteria shall also be exclusively used in establishing performance goals for
      Annual Incentive Awards granted to a Covered Employee under Section 8(c)
      hereof.

     

    (B)  Individual
      Performance Criteria.
      The
      grant, exercise and/or settlement of Performance Awards may also be contingent
      upon individual performance goals established by the Committee. If required
      for
      compliance with section 162(m) of the Code, such criteria shall be approved
      by
      the stockholders of the Company.

     

    (iii)  Performance
      Period; Timing for Establishing Performance Goals.
      Achievement of performance goals in respect of such Performance Awards shall
      be
      measured over a performance period of up to ten years, as specified by the
      Committee. Performance goals shall be established not later than 90 days after
      the beginning of any performance period applicable to such Performance Awards,
      or at such other date as may be required or permitted for “performance-based
      compensation” under section 162(m) of the Code.

     

    (iv)  Performance
      Award Pool.
      The
      Committee may establish a Performance Award pool, which shall be an unfunded
      pool, for purposes of measuring performance of the Company in connection with
      Performance Awards. The amount of such Performance Award pool shall be based
      upon the achievement of a performance goal or goals based on one or more of
      the
      criteria set forth in Section 8(b)(ii) hereof during the given performance
      period, as specified by the Committee in accordance with Section 8(b)(iii)
      hereof. The Committee may specify the amount of the Performance Award pool
      as a
      percentage of any of such criteria, a percentage thereof in excess of a
      threshold amount, or as another amount which need not bear a strictly
      mathematical relationship to such criteria.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (v)  Settlement
      of Performance Awards; Other Terms.
      After
      the end of each performance period, the Committee shall determine the amount,
      if
      any, of (A)
      the
      Performance Award pool, and the maximum amount of potential Performance Award
      payable to each Participant in the Performance Award pool, or (B) the
      amount of potential Performance Award otherwise payable to each Participant.
      Settlement of such Performance 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 Awards, but may not exercise discretion to increase any
      such amount payable to a Covered Employee in respect of a Performance Award
      subject to this Section 8(b). The Committee shall specify the circumstances
      in
      which such Performance Awards shall be paid or forfeited in the event of
      termination of employment by the Participant prior to the end of a performance
      period or settlement of Performance Awards.

     

    (c)  Annual
      Incentive Awards Granted to Designated Covered Employees.
      If the
      Committee determines that an Annual Incentive Award to be granted to an Eligible
      Person who is designated by the Committee as likely to be a Covered Employee
      should qualify as “performance-based compensation” for purposes of section
      162(m) of the Code, the grant, exercise and/or settlement of such Annual
      Incentive Award shall be contingent upon achievement of preestablished
      performance goals and other terms set forth in this Section 8(c).

     

    (i)  Annual
      Incentive Award Pool.
      The
      Committee may establish an Annual Incentive Award pool, which shall be an
      unfunded pool, for purposes of measuring performance of the Company in
      connection with Annual Incentive Awards. The amount of such Annual Incentive
      Award pool shall be based upon the achievement of a performance goal or goals
      based on one or more of the business criteria set forth in Section 8(b)(ii)
      hereof during the given performance period, as specified by the Committee in
      accordance with Section 8(b)(iii) hereof. The Committee may specify the amount
      of the Annual Incentive Award pool as a percentage of any of such business
      criteria, a percentage thereof in excess of a threshold amount, or as another
      amount which need not bear a strictly mathematical relationship to such business
      criteria.

     

    (ii)  Potential
      Annual Incentive Awards.
      Not
      later than the end of the 90th day of each fiscal year, or at such other date
      as
      may be required or permitted in the case of Awards intended to be
“performance-based compensation” under section 162(m) of the Code, the Committee
      shall determine the Eligible Persons who will potentially receive Annual
      Incentive Awards, and the amounts potentially payable thereunder, for that
      fiscal year, either out of an Annual Incentive Award pool established by such
      date under Section 8(c)(i) hereof or as individual Annual Incentive Awards.
      In
      the case of individual Annual Incentive Awards intended to qualify under section
      162(m) of the Code, the amount potentially payable shall be based upon the
      achievement of a performance goal or goals based on one or more of the business
      criteria set forth in Section 8(b)(ii) hereof in the given performance year,
      as
      specified by the Committee; in other cases, such amount shall be based on such
      criteria as shall be established by the Committee. In all cases, the maximum
      Annual Incentive Award of any Participant shall be subject to the limitation
      set
      forth in Section 5 hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iii)  Payout
      of Annual Incentive Awards.
      After
      the end of each fiscal year, the Committee shall determine the amount, if any,
      of (A)
      the
      Annual Incentive Award pool, and the maximum amount of potential Annual
      Incentive Award payable to each Participant in the Annual Incentive Award pool,
      or (B)
      the
      amount of potential Annual Incentive Award otherwise payable to each
      Participant. The Committee may, in its discretion, determine that the amount
      payable to any Participant as a final Annual Incentive Award shall be increased
      or reduced from the amount of his or her potential Annual Incentive Award,
      including a determination to make no final Award whatsoever, but may not
      exercise discretion to increase any such amount in the case of an Annual
      Incentive Award intended to qualify under section 162(m) of the Code. The
      Committee shall specify the circumstances in which an Annual Incentive Award
      shall be paid or forfeited in the event of termination of employment by the
      Participant prior to the end of a fiscal year or settlement of such Annual
      Incentive Award.

     

    (d)  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 under Section 8(b), and the amount of any Annual Incentive Award pool
      or
      potential individual Annual Incentive Awards and the amount of final Annual
      Incentive Awards under Section 8(c), shall be made in writing in the case of
      any
      Award intended to qualify under section 162(m) of the Code. The Committee may
      not delegate any responsibility relating to such Performance Awards or Annual
      Incentive Awards.

     

    (e)  Status
      of Section 8(b) and Section 8(c) Awards under Section 162(m) of the
      Code.
      It is
      the intent of the Company that Performance Awards and Annual Incentive Awards
      under Sections 8(b) and 8(c) hereof granted to persons who are designated by
      the
      Committee as likely to be Covered Employees within the meaning of section 162(m)
      of the Code and regulations thereunder (including Treasury Regulation §1.162-27
      and successor regulations thereto) shall, if so designated by the Committee,
      constitute “performance-based compensation” within the meaning of section 162(m)
      of the Code and regulations thereunder. Accordingly, the terms of Sections
      8(b),
      (c), (d) and (e), including the definitions of Covered Employee and other terms
      used therein, shall be interpreted in a manner consistent with section 162(m)
      of
      the Code and regulations thereunder. The foregoing notwithstanding, because
      the
      Committee cannot determine with certainty whether a given Participant 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, who is likely to be a Covered Employee with respect to that fiscal year.
      If any provision of this Plan as in effect on the date of adoption or any
      agreements relating to Performance Awards or Annual Incentive Awards that are
      designated as intended to comply with section 162(m) of the Code does not comply
      or is inconsistent with the requirements of section 162(m) of the Code or
      regulations thereunder, such provision shall be construed or deemed amended
      to
      the extent necessary to conform to such requirements.

     

    9.  Recapitalization
      or Reorganization.

     

    (a)  Existence
      of Plans and Awards.
      The
      existence of this Plan and the Awards granted hereunder shall not affect in
      any
      way the right or power of the Board or the stockholders of the Company to make
      or authorize any adjustment, recapitalization, reorganization or other change
      in
      the Company’s capital structure or its business, any merger or consolidation of
      the Company, any issue of debt or equity securities ahead of or affecting Stock
      or the rights thereof, the dissolution or liquidation of the Company or any
      sale, lease, exchange or other disposition of all or any part of its assets
      or
      business or any other corporate act or proceeding. 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)  Subdivision
      or Consolidation of Shares.
      The
      terms of an Award and the number of shares of Stock authorized pursuant to
      Section 4 for issuance under the Plan shall be subject to adjustment from time
      to time, in accordance with the following provisions:

     

    (i)  If
      at any
      time, or from time to time, the Company shall subdivide as a whole (by
      reclassification, by a Stock split, by the issuance of a distribution on Stock
      payable in Stock, or otherwise) the number of shares of Stock then outstanding
      into a greater number of shares of Stock, then (A)
      the
      maximum number of shares of Stock available for the Plan as provided in Section
      4 shall be increased proportionately, and the kind of shares or other securities
      available for the Plan shall be appropriately adjusted, (B)
      the
      number of shares of Stock (or other kind of shares or securities) that may
      be
      acquired under any Award shall be increased proportionately, and (C)
      the
      price (including the exercise price) for each share of Stock (or other kind
      of
      shares or securities) subject to then outstanding Awards shall be reduced
      proportionately, without changing the aggregate purchase price or value as
      to
      which outstanding Awards remain exercisable or subject to
      restrictions.

     

    (ii)  If
      at any
      time, or from time to time, the Company shall consolidate as a whole (by
      reclassification, reverse Stock split, or otherwise) the number of shares of
      Stock then outstanding into a lesser number of shares of Stock, (A)
      the
      maximum number of shares of Stock available for the Plan as provided in Section
      4 shall be decreased proportionately, and the kind of shares or other securities
      available for the Plan shall be appropriately adjusted, (B)
      the
      number of shares of Stock (or other kind of shares or securities) that may
      be
      acquired under any Award shall be decreased proportionately, and (C)
      the
      price (including the exercise price) for each share of Stock (or other kind
      of
      shares or securities) subject to then outstanding Awards shall be increased
      proportionately, without changing the aggregate purchase price or value as
      to
      which outstanding Awards remain exercisable or subject to
      restrictions.

     

    (iii)  Whenever
      the number of shares of Stock subject to outstanding Awards and the price for
      each share of Stock subject to outstanding Awards are required to be adjusted
      as
      provided in this Section 9(b), the Committee shall promptly prepare a notice
      setting forth, in reasonable detail, the event requiring adjustment, the amount
      of the adjustment, the method by which such adjustment was calculated, and
      the
      change in price and the number of shares of Stock, other securities, cash,
      or
      property purchasable subject to each Award after giving effect to the
      adjustments. The Committee shall promptly give each Participant such a
      notice.

     

    (iv)  Adjustments
      under Subsections 9(b)(i) and (ii) shall be made by the Committee, and its
      determination as to what adjustments shall be made and the extent thereof shall
      be final, binding, and conclusive. No fractional interest shall be issued under
      the Plan on account of any such adjustments.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)  Corporate
      Restructuring.
      If the
      Company recapitalizes, reclassifies its capital stock, or otherwise changes
      its
      capital structure (a “recapitalization”), the number and class of shares of
      Stock covered by an Option theretofore granted shall be adjusted so that such
      Option shall thereafter cover the number and class of shares of stock and
      securities to which the holder would have been entitled pursuant to the terms
      of
      the recapitalization if, immediately prior to the recapitalization, the holder
      had been the holder of record of the number of shares of Stock then covered
      by
      such Option and the share limitations provided in Sections 4 and 5 shall be
      adjusted in a manner consistent with the recapitalization. Upon a Change in
      Control the Committee, acting in its sole discretion without the consent or
      approval of any holder, shall effect one or more of the following alternatives,
      which may vary among individual holders and which may vary among Options held
      by
      any individual holder: (1)
      accelerate the time at which Options then outstanding may be exercised so that
      such Options may be exercised in full for a limited period of time on or before
      a specified date (before or after such Change in Control) fixed by the
      Committee, after which specified date all unexercised Options and all rights
      of
      holders thereunder shall terminate, (2)
      require
      the mandatory surrender to the Company by selected holders of some or all of
      the
      outstanding Options held by such holders (irrespective of whether such Options
      are then exercisable under the provisions of this Plan) as of a date, before
      or
      after such Change in Control, specified by the Committee, in which event the
      Committee shall thereupon cancel such Options and pay to each holder an amount
      of cash per share equal to the excess, if any, of the amount calculated in
      Section 9(d) (the “Change in Control Price”) of the shares subject to such
      Option over the exercise price(s) under such Options for such shares, or
(3)
      make
      such adjustments to Options then outstanding as the Committee deems appropriate
      to reflect such Change in Control; provided, however, that the Committee may
      determine in its sole discretion that no adjustment is necessary to Options
      then
      outstanding; provided, further, that the right to make such adjustments shall
      include, but not be limited to, the modification of an Option such that the
      holder of the Option shall be entitled to purchase or receive (in lieu of the
      total shares that the holder would otherwise be entitled to purchase or receive
      under the Option (the “Total Shares”)), the number of shares of stock, other
      securities, cash or property to which the Total Shares would have been entitled
      to in connection with the Change in Control, at an aggregate exercise price
      equal to the exercise price that would have been payable if the Total Shares
      had
      been purchased upon the exercise of the Option immediately before the
      consummation of the Change in Control.

     

    (d)  Change
      in Control Price.
      The
“Change in Control Price” shall equal the amount determined in clause (i), (ii),
      (iii), (iv) or (v), whichever is applicable, as follows: (i)
      the per
      share price offered to holders of the same class of Stock of the Company in
      any
      such merger or consolidation, (ii)
      the per
      share value of the Stock immediately before the Change in Control without regard
      to assets sold in the Change in Control and assuming the Company has received
      the consideration paid for the assets in the case of a sale of the assets,
      (iii)
      the
      amount distributed per share of Stock in a dissolution transaction, (iv)
      the
      price per share offered to holders of the same class of Stock of the Company
      in
      any tender offer or exchange offer whereby a Change in Control takes place,
      or
(v)
      if such
      Change in Control occurs other than pursuant to a tender or exchange offer,
      the
      fair market value per share of the shares into which such Options being
      surrendered are exercisable, as determined by the Committee as of the date
      determined by the Committee to be the date of cancellation and surrender of
      such
      Options. In the event that the consideration offered to stockholders of the
      Company in any transaction described in this Section 9(d) or Section 9(c) above
      consists of anything other than cash, the Committee shall determine the fair
      cash equivalent of the portion of the consideration offered which is other
      than
      cash.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  Non-Option
      Awards.
      In the
      event of changes in the outstanding Stock by reason of recapitalization,
      reorganizations, mergers, consolidations, combinations, exchanges or other
      relevant changes in capitalization occurring after the date of the grant of
      any
      Award and not otherwise provided for by this Section 9, any outstanding Awards
      and any agreements evidencing such Awards shall be subject to adjustment by
      the
      Committee at its discretion as to the number and price of shares of Stock or
      other consideration subject to such Awards. In the event of any such change
      in
      the outstanding Stock, the aggregate number of shares available under this
      Plan
      may be appropriately adjusted by the Committee, whose determination shall be
      conclusive.

     

    (f)  Additional
      Issuances.
      Except
      as hereinbefore expressly provided, the issuance by the Company of shares of
      stock of any class or securities convertible into shares of stock of any class,
      for cash, property, labor or services, upon direct sale, upon the exercise
      of
      rights or warrants to subscribe therefor, or upon conversion of shares or
      obligations of the Company convertible into such shares or other securities,
      and
      in any case whether or not for fair value, shall not affect, and no adjustment
      by reason thereof shall be made with respect to, the number of shares of Stock
      subject to Awards theretofore granted or the purchase price per share, if
      applicable.

     

    (g)  Restricted
      Stock Awards.
      Plan
      provisions to the contrary notwithstanding, with respect to any Restricted
      Stock
      Awards outstanding at the time a Change in Control as described in Section
      2(g)
      occurs, the Committee may, in its discretion and as of a date determined by
      the
      Committee, fully vest any or all Stock awarded to the holder pursuant to such
      Restricted Stock Award and then outstanding and, upon such vesting, all
      restrictions applicable to such Restricted Stock Award shall terminate as of
      such date. Any action by the Committee pursuant to this Section 9(g) may vary
      among individual holders and may vary among the Restricted Stock Awards held
      by
      any individual holder.

     

    10.  General
      Provisions.

     

    (a)  Transferability.

     

    (i)  Permitted
      Transferees.
      The
      Committee may, in its discretion, permit a Participant to transfer all or any
      portion of an Option, Stock Appreciation Right, or Restricted Stock Award (if
      such Restricted Stock Award does not require the transfer of consideration
      by
      the Participant or the holder other than usual and customary service) after
      the
      Company’s initial registration of the Stock under section 12(b) or 12(g) of the
      Exchange Act, or authorize all or a portion of such Awards to be granted to
      an
      Eligible Person to be on terms which permit transfer by such Participant;
      provided that, in either case the transferee or transferees must be any child,
      stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
      sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
      daughter-in-law, brother-in-law, or sister-in-law, including adoptive
      relationships, in each case with respect to the Participant, any person sharing
      the Participant’s household (other than a tenant or employee of the Company), a
      trust in which these persons have more than fifty percent of the beneficial
      interest, a foundation in which these persons (or the Participant) control
      the
      management of assets, and any other entity in which these persons (or the
      Participant) own more than fifty percent of the voting interests (collectively,
      “Permitted Transferees”); provided further that, (X) there may be no
      consideration for any such transfer and (Y) subsequent transfers of Awards
      transferred as provided above shall be prohibited except subsequent transfers
      back to the original holder of the Award and transfers to other Permitted
      Transferees of the original holder. Agreements evidencing Awards with respect
      to
      which such transferability is authorized at the time of grant must be approved
      by the Committee, and must expressly provide for transferability in a manner
      consistent with this Subsection 10(a)(i).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)  Qualified
      Domestic Relations Orders.
      An
      Option, Stock Appreciation Right, or Restricted Stock Award (if such Restricted
      Stock Award does not require the transfer of consideration by the Participant
      or
      the holder other than usual and customary service) after the Company’s initial
      registration of the Stock under section 12(b) or 12(g) of the Exchange Act,
      may
      be transferred, to a Permitted Transferee, pursuant to a domestic relations
      order entered or approved by a court of competent jurisdiction upon delivery
      to
      the Company of written notice of such transfer and a certified copy of such
      order.

     

    (iii)  Other
      Transfers.
      Except
      as expressly permitted by Subsections 10(a)(i) and 10(a)(ii), Awards shall
      not
      be transferable other than by will or the laws of descent and distribution
      except that in the Committee’s discretion a Stock Appreciation Right (if such
      Stock Appreciation Right is not exercisable for Stock and not subject to the
      Participant’s or holder’s discretion as to the timing or method of payment) or
      Restricted Stock Award (if such Restricted Stock Award does not require the
      transfer of consideration by the Participant or the holder other than usual
      and
      customary service) may be transferable, however, not for consideration.
      Notwithstanding anything to the contrary in this Section 10, an Incentive Stock
      Option shall not be transferable other than by will or the laws of descent
      and
      distribution.

     

    (iv)  Effect
      of Transfer.
      Following the transfer of any Award as contemplated by Subsections 10(a)(i),
      10(a)(ii) and 10(a)(iii), (A)
      such
      Award shall continue to be subject to the same terms and conditions as were
      applicable immediately prior to transfer, provided that the term “Participant”
shall be deemed to refer to the Permitted Transferee, the recipient under a
      qualified domestic relations order, the estate or heirs of a deceased
      Participant, or other transferee, as applicable, to the extent appropriate
      to
      enable the Participant to exercise the transferred Award in accordance with
      the
      terms of this Plan and applicable law and (B)
      the
      provisions of the Award relating to exercisability hereof shall continue to
      be
      applied with respect to the original Participant and, following the occurrence
      of any such events described therein the Awards shall be exercisable by the
      Permitted Transferee, the recipient under a qualified domestic relations order,
      the estate or heirs of a deceased Participant, or other transferee, as
      applicable, only to the extent and for the periods that would have been
      applicable in the absence of the transfer.

     

    (v)  Procedures
      and Restrictions.
      Any
      Participant desiring to transfer an Award as permitted under Subsections
      10(a)(i), 10(a)(ii) or 10(a)(iii) shall make application therefor in the manner
      and time specified by the Committee and shall comply with such other
      requirements as the Committee may require to assure compliance with all
      applicable securities laws. The Committee shall not give permission for such
      a
      transfer if (A)
      it would
      give rise to short-swing liability under section 16(b) of the Exchange Act
      or
(B)
      it may
      not be made in compliance with all applicable federal, state and foreign
      securities laws.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (vi)  Registration.
      To the
      extent the issuance to any Permitted Transferee of any shares of Stock issuable
      pursuant to Awards transferred as permitted in this Section 10(a) is not
      registered pursuant to the effective registration statement of the Company
      generally covering the shares to be issued pursuant to this Plan to initial
      holders of Awards, the Company shall not have any obligation to register the
      issuance of any such shares of Stock to any such transferee.

     

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

     

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

     

    (d)  Limitation
      on Rights Conferred under Plan.
      Neither
      this Plan nor any action taken hereunder shall be construed as (i)
      giving
      any Eligible Person or Participant the right to continue as an Eligible Person
      or Participant or in the employ or service of the Company or a Subsidiary,
      (ii)
      interfering in any way with the right of the Company or a Subsidiary to
      terminate any Eligible Person’s or Participant’s employment or service at any
      time, (iii)
      giving
      an Eligible Person or Participant any claim to be granted any Award under this
      Plan or to be treated uniformly with other Participants and employees, or
(iv) conferring
      on a Participant any of the rights of a stockholder of the Company unless and
      until the Participant is duly issued or transferred shares of Stock in
      accordance with the terms of an Award.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (e)  Unfunded
      Status of Awards.
      This
      Plan is intended to constitute an “unfunded” plan for certain incentive
      awards.

     

    (f)  Nonexclusivity
      of this Plan.
      Neither
      the adoption of this Plan by the Board nor its submission to the stockholders
      of
      the Company for approval shall be construed as creating any limitations on
      the
      power of the Board or a committee thereof to adopt such other incentive
      arrangements as it may deem desirable, including incentive arrangements and
      awards which do not qualify under section 162(m) of the Code. Nothing contained
      in this Plan shall be construed to prevent the Company or any Subsidiary from
      taking any corporate action which is deemed by the Company or such Subsidiary
      to
      be appropriate or in its best interest, whether or not such action would have
      an
      adverse effect on this Plan or any Award made under this Plan. No employee,
      beneficiary or other person shall have any claim against the Company or any
      Subsidiary as a result of any such action.

     

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

     

    (h)  Severability.
      If any
      provision of this Plan is held to be illegal or invalid for any reason, the
      illegality or invalidity shall not affect the remaining provisions hereof,
      but
      such provision shall be fully severable and the Plan shall be construed and
      enforced as if the illegal or invalid provision had never been included herein.
      If any of the terms or provisions of this Plan or any Award agreement conflict
      with the requirements of Rule 16b-3 (as those terms or provisions are applied
      to
      Eligible Persons who are subject to section 16(b) of the Exchange Act) or
      section 422 of the Code (with respect to Incentive Stock Options), then those
      conflicting terms or provisions shall be deemed inoperative to the extent they
      so conflict with the requirements of Rule 16b-3 (unless the Board or the
      Committee, as appropriate, has expressly determined that the Plan or such Award
      should not comply with Rule 16b-3) or section 422 of the Code. With respect
      to
      Incentive Stock Options, if this Plan does not contain any provision required
      to
      be included herein under section 422 of the Code, that provision shall be deemed
      to be incorporated herein with the same force and effect as if that provision
      had been set out at length herein; provided, further, that, to the extent any
      Option that is intended to qualify as an Incentive Stock Option cannot so
      qualify, that Option (to that extent) shall be deemed an Option not subject
      to
      section 422 of the Code for all purposes of the Plan.

     

    (i)  Governing
      Law.
      All
      questions arising with respect to the provisions of the Plan and Awards shall
      be
      determined by application of the laws of the State of Delaware, without giving
      effect to any conflict of law provisions thereof, except to the extent Delaware
      law is preempted by federal law. The obligation of the Company to sell and
      deliver Stock hereunder is subject to applicable federal and state laws and
      to
      the approval of any governmental authority required in connection with the
      authorization, issuance, sale, or delivery of such Stock.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (j)  Conditions
      to Delivery of Stock.
      Nothing
      herein or in any Award granted hereunder or any Award agreement shall require
      the Company to issue any shares with respect to any Award if that issuance
      would, in the opinion of counsel for the Company, constitute a violation of
      the
      Securities Act or any similar or superseding statute or statutes, any other
      applicable statute or regulation, or the rules of any applicable securities
      exchange or securities association, as then in effect. At the time of any
      exercise of an Option or Stock Appreciation Right, or at the time of any grant
      of a Restricted Stock Award, the Company may, as a condition precedent to the
      exercise of such Option or Stock Appreciation Right or vesting of any Restricted
      Stock Award, require from the Participant (or in the event of his death, his
      legal representatives, heirs, legatees, or distributees) such written
      representations, if any, concerning the holder’s intentions with regard to the
      retention or disposition of the shares of Stock being acquired pursuant to
      the
      Award and such written covenants and agreements, if any, as to the manner of
      disposal of such shares as, in the opinion of counsel to the Company, may be
      necessary to ensure that any disposition by that holder (or in the event of
      the
      holder’s death, his legal representatives, heirs, legatees, or distributees)
      will not involve a violation of the Securities Act or any similar or superseding
      statute or statutes, any other applicable state or federal statute or
      regulation, or any rule of any applicable securities exchange or securities
      association, as then in effect. No Option or Stock Appreciation Right shall
      be
      exercisable and no restriction on any Restricted Stock Award shall lapse with
      respect to a Participant unless and until the holder thereof shall have paid
      cash or property to, or performed services for, the Company or any of its
      Subsidiaries that the Committee believes is equal to or greater in value than
      the par value of the Stock subject to such Award.Exhibit
      10.9

     

    INDEPENDENT
      CONTRACTOR AGREEMENT

     

    

    This
      Agreement is entered into as of the 1st
      day of
      January, 2007, between Osage energy Corporation (“the Company”) and Greg
      Franklin (“the Contractor”).

    

    
      	1.	
              Independent
                Contractor.
                Subject to the terms and conditions of this Agreement, the Company
                hereby
                engages the Contractor as an independent contractor to perform the
                services set forth herein, and the Contractor hereby accepts such
                engagement.

            

    

    

    
      	2.	
              Duties,
                Term, and Compensation.
                The Contractor’s duties, term of engagement, compensation and provisions
                for payment thereof are detailed in the attached Exhibit A, which
                may be
                amended in writing from time to time by the Contractor and agreed
                to by
                the Company, and which collectively are hereby incorporated by
                reference.

            

    

    

    
      	3.	
              Expenses.
                During the term of this Agreement, the Contractor shall bill and
                the
                Company shall reimburse the Contractor for all reasonable and approved
                out-of-pocket expenses which are incurred in connection with the
                performance of the duties hereunder. Notwithstanding the foregoing,
                expenses for the time spend by Consultant in traveling to and from
                Company
                facilities shall not be
                reimbursable.

            

    

    

    
      	4.	
              Confidentiality.
                The Contractor acknowledges that during the engagement he will have
                access
                to and become acquainted with various trade secrets, inventions,
                innovations, processes, information, records and specifications owned
                or
                licensed by the Company and/or used by the Company in connection
                with the
                operation of its business including, without limitation, the Company’s
                business and product processes, methods, customer lists, accounts
                and
                procedures. The Contractor agrees that he will not disclose any of
                the
                aforesaid, directly or indirectly, or use any of them in any manner,
                either during the term of this Agreement or at any time thereafter,
                except
                as required in the course of this engagement with the Company. All
                files,
                records, documents, blueprints, specifications, information, letters,
                notes, media lists, original artwork/creative, notebooks, and similar
                items relating to the business of the Company, whether prepared by
                the
                Contractor or otherwise coming into his possession, shall remain
                the
                exclusive property of the Company. The Contractor shall not retain
                any
                copies of the foregoing without the Company’s prior written permission.
                Upon the expiration or earlier termination of this Agreement, or
                whenever
                requested by the Company, the Contractor shall immediately deliver
                to the
                Company all such files, records, documents, specifications, information,
                and other items in his possession or under his control.
                

            

    

    

    
      	5.	
              Conflicts
                of Interest; Non-hire Provision.
                The Contractor represents that he is free to enter into this Agreement,
                and that this engagement does not violate the terms of any agreement
                between the Contractor and any third party. Further, the Contractor,
                in
                rendering his duties shall not utilize any invention, discovery,
                development, improvement, innovation, or trade secret in which he
                does not
                have a proprietary interest. During the term of this agreement, the
                Contractor shall devote as much of his productive time, energy and
                abilities to the performance of his duties hereunder as is necessary
                to
                perform the required duties in a timely and productive manner. The
                Contractor is expressly free to perform services for other parties
                while
                performing services for the Company.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	6.	
              Merger.
                This Agreement shall not be terminated by the merger or consolidation
                of
                the Company into or with any other
                entity.

            

    

    

    
      	7.	
              Termination.
                The Company may terminate this Agreement at any time by 30 days’ written
                notice to the Contractor. 

            

    

    

    
      	8.	
              Independent
                Contractor.
                This Agreement shall not render the Contractor an employee, partner,
                agent
                of, or joint venturer with the Company for any purpose. The Contractor
                is
                and will remain an independent contractor in his relationship to
                the
                Company. The Company shall not be responsible for withholding taxes
                with
                respect to the Contractor’s compensation hereunder. The Contractor shall
                have no claim against the Company hereunder or otherwise for vacation
                pay,
                sick leave, retirement benefits, social security, worker’s compensation,
                health or disability benefits, unemployment insurance benefits, or
                employee benefits of any kind.

            

    

    

    
      	9.	
              Successors
                and Assigns.
                All of the provisions of this Agreement shall be binding upon and
                inure to
                the benefit of the parties hereto and their respective heirs, if
                any,
                successors, and assigns.

            

    

    

    
      	10.	
              Choice
                of Law.
                The laws of the state of California shall govern the validity of
                this
                Agreement, the construction of its terms and the interpretation of
                the
                rights and duties of the parties
                hereto.

            

    

    

    
      	11.	
              Arbitration.
                Any controversies arising out of the terms of this Agreement or its
                interpretation shall be settled in San Diego, California in accordance
                with the rules of the American Arbitration Association, and the judgment
                upon award may be entered in any court having jurisdiction
                thereof.

            

    

    

    
      	12.	
              Headings.
                Section
                headings are not to be considered a part of this Agreement and are
                not
                intended to be a full and accurate description of the contents
                hereof.

            

    

    

    
      	13.	
              Waiver.
                Waiver by one party hereto of breach of any provision of this Agreement
                by
                the other shall not operate or be construed as a continuing
                waiver.

            

    

    

    
      	14.	
              Assignment.
                The Contractor shall not assign any of his rights under this Agreement,
                or
                delegate the performance of any of his duties hereunder, without
                the prior
                written consent of the Company.

            

    

    

    
      	15.	
              Notices.
                Any and all notices, demands, or other communications required or
                desired
                to be given hereunder by any party shall be in writing and shall
                be
                validly given or made to another party if personally served, or if
                deposited in the United States mail, certified or registered, postage
                prepaid, return receipt requested. If such notice or demand is served
                personally, notice shall be deemed constructively made at the time
                of such
                personal service. If such notice, demand or other communication is
                given
                by mail, such notice shall be conclusively deemed given five days
                after
                deposit thereof in the United States mail addressed to the party
                to whom
                such notice, demand or other communication is to be given as
                follows:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
            	If
              to the Contractor:	
              Greg
                Franklin

            

    

    100
      Park
      Avenue, Suite 1040

    Oklahoma
      City, Oklahoma

    Tel:
      (405) 270-0989

    

    
      	
            	If
              to the Company:	
              Osage
                Energy Corporation

            

    

    Attn:
      Kim
      Bradford, President and CEO

    888
      Prospect Street

    Suite
      210

    La
      Jolla,
      CA 92037

    

    Any
      party
      hereto may change its address for purposes of this paragraph by written notice
      given in the manner provided above.

    

    
      	16.	
              Modification
                or Amendment.
                No
                amendment, change or modification of this Agreement shall be valid
                unless
                in writing signed by the parties
                hereto.

            

    

    

    
      	17.	
              Entire
                Understanding.
                This document and any exhibit attached constitute the entire understanding
                and agreement of the parties, and any and all prior agreements,
                understandings, and representations are hereby terminated and canceled
                in
                their entirety and are of no further force and
                effect.

            

    

    

    
      	18.	
              Unenforceability
                of Provisions.
                If
                any provision of this Agreement, or any portion thereof, is held
                to be
                invalid and unenforceable, then the remainder of this Agreement shall
                nevertheless remain in full force and
                effect.

            

    

    

    IN
      WITNESS WHEREOF the undersigned have executed this Agreement as of the day
      and
      year first written above. The parties hereto agree that facsimile signatures
      shall be as effective as if originals.

    

    Osage
      Energy Corporation    Greg
      Franklin

    

    By:_______________________   By:____________________

    Its:
      President & CEO

       

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    SCHEDULE
      A

    

    DUTIES,
      TERM, AND COMPENSATION

    

    
      	DUTIES:	
              The
                Contractor will perform all duties typically required of a Geologist
                Consultant, including overseeing all operational aspects of the Company
                and heading up the exploration team of the Company.
                

            

    

    

    He
      will
      report directly to Kim Bradford, President and CEO and to any other party
      designated by Kim Bradford in connection with the performance of the duties
      under this Agreement and shall fulfill any other duties reasonably requested
      by
      the Company and agreed to by the Contractor.

    

    
      	TERM:	
              This
                engagement shall commence upon execution of this Agreement and shall
                continue in full force and effect through December 31, 2007. The
                agreement
                may only be extended thereafter by mutual agreement, unless terminated
                earlier by operation of and in accordance with this
                Agreement.

            

    

    

    
      COMPENSATION:
        As
          compensation for the services rendered pursuant to this Agreement, the
          Company
          shall pay the Contractor the monthly sum of $6,000 to be paid on the
          1st
          day of
          each month in advance, increasing to $8,000 per month starting August 1,
          2007.

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