Document:

THIS  OPTION AND THE SHARES OF COMMON  STOCK  ISSUABLE  UPON
           EXERCISE  OF THE OPTION HAVE NOT BEEN  REGISTERED  UNDER THE
           SECURITIES ACT OF 1933, AS AMENDED,  OR ANY STATE SECURITIES
           LAWS.  THIS  OPTION  AND  THE  COMMON  STOCK  ISSUABLE  UPON
           EXERCISE OF THIS  OPTION MAY NOT BE SOLD,  OFFERED FOR SALE,
           PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE  OF AN  EFFECTIVE
           REGISTRATION  STATEMENT AS TO THIS OPTION UNDER SAID ACT AND
           ANY  APPLICABLE  STATE  SECURITIES  LAWS  OR AN  OPINION  OF
           COUNSEL REASONABLY  SATISFACTORY TO WINDSWEPT  ENVIRONMENTAL
           GROUP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                    Right to Purchase up to 11,145,000 Shares
                    -----------------------------------------
             of Common Stock of Windswept Environmental Group, Inc.
             ------------------------------------------------------
                   (subject to adjustment as provided herein)

                                     OPTION

No.                                              Issue Date: September 29, 2006
   ----------------

     WINDSWEPT ENVIRONMENTAL GROUP, INC., a corporation organized under the laws
of the State of Delaware ("Company"), hereby certifies that, for value received,
LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this  Option and at any time or from time to time before
5:00 p.m. New York time,  through the close of business  September 29, 2026 (the
"Expiration  Date"),  up to 11,145,000  fully paid and  nonassessable  shares of
Common  Stock (as  hereinafter  defined),  $0.0001  par value per share,  at the
applicable Exercise Price per share (as defined below). The number and character
of such shares of Common Stock and the  applicable  Exercise Price per share are
subject to adjustment as provided herein.

     As used herein the following terms,  unless the context otherwise requires,
have the following  respective  meanings:

          (a) The term "Company" shall include  Windswept  Environmental  Group,
     Inc. and any corporation that shall succeed,  or assume the obligations of,
     Windswept Environmental Group, Inc. hereunder.

          (b) The term "Common Stock"  includes (i) the Company's  Common Stock,
     $0.0001 par value per share;  and (ii) any other  securities  into which or
     for  which  any of the  securities  described  in (a) may be  converted  or
     exchanged pursuant to a plan of recapitalization,  reorganization,  merger,
     sale of assets or otherwise.

<PAGE>

          (c) The "Exercise Price" applicable under this Option shall be a price
     of $0.0001 per share.

          (d) The term "Other Securities" refers to any stock (other than Common
     Stock) and other  securities of the Company or any other person  (corporate
     or otherwise) which the Holder at any time shall be entitled to receive, or
     shall  have  received,  on the  exercise  of the  Option,  in lieu of or in
     addition to Common  Stock,  or which at any time shall be issuable or shall
     have been issued in exchange for or in replacement of Common Stock or Other
     Securities  pursuant to Section 4 or otherwise.

          1. Exercise of Option.
             ------------------

             1.1   Number of Shares  Issuable upon Exercise.  From and after the
                   ----------------------------------------
date  hereof,  the Holder  shall be entitled to receive,  upon  exercise of this
Option  in  whole or in  part,  by  delivery  of an  original  or fax copy of an
exercise  notice  in the  form  attached  hereto  as  Exhibit  A (the  "Exercise
Notice"),  shares of Common Stock of the Company, subject to adjustment pursuant
to Section 4. Notwithstanding anything herein to the contrary, in no event shall
the Holder be entitled to exercise  any portion of this Option in excess of that
portion  of this  Option  upon  exercise  of which the sum of (1) the  number of
shares of Common  Stock  beneficially  owned by the  Holder  and its  Affiliates
(other  than  shares of Common  Stock  which  may be deemed  beneficially  owned
through  the  ownership  of  the  unexercised  portion  of  the  Option  or  the
unexercised or  unconverted  portion of any other security of the Holder subject
to a limitation on exercise or conversion analogous to the limitations contained
herein) and (2) the number of shares of Common Stock  issuable upon the exercise
of the portion of this Option with  respect to which the  determination  of this
proviso is being made,  would result in  beneficial  ownership by the Holder and
its Affiliates of any amount greater than 9.99% of the then  outstanding  shares
of Common Stock  (whether or not, at the time of such  exercise,  the Holder and
its Affiliates  beneficially own more than 9.99% of the then outstanding  shares
of Common  Stock).  As used  herein,  the term  "Affiliate"  means any person or
entity that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a person or entity,  as such
terms are used in and  construed  under Rule 144 under the  Securities  Act. For
purposes  of the  second  preceding  sentence,  beneficial  ownership  shall  be
determined in accordance  with Section 13(d) of the  Securities  Exchange Act of
1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided
in clause (1) of such sentence.  For any reason at any time, upon the written or
oral  request of the  Holder,  the Company  shall  within one (1)  Business  Day
confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding.  The preceding  limitations set forth herein (x) may be waived
by the Holder upon  provision of no less than sixty-one (61) days' prior written
notice to the  Company  and (y)  shall  automatically  become  null and void (i)
following  notice to the Company upon the occurrence and during the  continuance
of an Event of  Default  or (ii)  upon  receipt  by the  Holder  of a Notice  of
Redemption.

                                      -2-

               1.2 Fair Market  Value.  For  purposes  hereof,  the "Fair Market
                   ------------------
Value" of a share of Common  Stock as of a particular  date (the  "Determination
Date") shall mean:

               (a) If the Company's Common Stock is traded on the New York Stock
          Exchange,  American  Stock  Exchange or the Global  Select,  Global or
          Capital Market of The Nasdaq Stock Market,  LLC  ("Nasdaq")or  another
          national   exchange   or,   then  the  closing  or  last  sale  price,
          respectively, reported for the last business day immediately preceding
          the  Determination  Date.

               (b) If the  Company's  Common Stock is not traded on the New York
          Stock Exchange, American Stock Exchange the Nasdaq or another national
          exchange but is quoted on the OTC Bulletin Board,  then the average of
          the closing bid and asked prices  reported  for the last  business day
          immediately  preceding the Determination  Date.

               (c) Except as  provided  in clause (d)  below,  if the  Company's
          Common  Stock  is not  publicly  traded,  then as the  Holder  and the
          Company  agree  or in the  absence  of  agreement  by  arbitration  in
          accordance  with the rules then in effect of the American  Arbitration
          Association,  before a single  arbitrator to be chosen from a panel of
          persons  qualified by education  and training to pass on the matter to
          be  decided.

               (d) If the  Determination  Date  is the  date  of a  liquidation,
          dissolution  or winding up, or any event  deemed to be a  liquidation,
          dissolution or winding up pursuant to the Company's charter,  then all
          amounts  to be  payable  per  share to  holders  of the  Common  Stock
          pursuant to the charter in the event of such liquidation,  dissolution
          or winding  up,  plus all other  amounts  to be  payable  per share in
          respect of the Common Stock in liquidation under the charter, assuming
          for the  purposes  of this clause (d) that all of the shares of Common
          Stock then issuable upon exercise of the Option are outstanding at the
          Determination Date.

               1.3 Company Acknowledgment.  The Company will, at the time of the
                   ----------------------
exercise of the Option,  upon the request of the Holder  hereof  acknowledge  in
writing its  continuing  obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in accordance with
the provisions of the Option. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

               1.4 Trustee for Option Holders. In the event that a bank or trust
                   --------------------------
company  shall  have been  appointed  as  trustee  for the  Holder of the Option
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of an option agent (as  hereinafter  described) and shall accept,  in
its own name for the account of the Company or such  successor  person as may be
entitled  thereto,  all  amounts  otherwise  payable  to  the  Company  or  such
successor,  as the case may be, on  exercise  of this  Option  pursuant  to this
Section 1.

                                      -3-

               2. Procedure for Exercise.
                  ----------------------

               2.1  Delivery  of Stock  Certificates,  Etc.,  on  Exercise.  The
                    ------------------------------------------------------
Company  agrees that the shares of Common Stock  purchased upon exercise of this
Option  shall be deemed to be issued to the Holder as the  record  owner of such
shares as of the close of business  on the date on which this Option  shall have
been  surrendered  and payment made for such shares in accordance  herewith.  As
soon as practicable after the exercise of this Option in full or in part, and in
any event within three (3) business days thereafter,  the Company at its expense
(including  the payment by it of any  applicable  issue  taxes) will cause to be
issued in the name of and  delivered  to the  Holder,  or as such  Holder  (upon
payment  by  such  Holder  of any  applicable  transfer  taxes)  may  direct  in
compliance with applicable  securities  laws, a certificate or certificates  for
the number of duly and validly issued,  fully paid and  nonassessable  shares of
Common  Stock (or Other  Securities)  to which such Holder  shall be entitled on
such exercise,  plus, in lieu of any fractional share to which such Holder would
otherwise be entitled,  cash equal to such fraction  multiplied by the then Fair
Market  Value  of one  full  share,  together  with  any  other  stock  or other
securities and property  (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

               2.2  Exercise.
                    --------

               (a) Subject to  subsection  (b) below,  payment  shall be made in
cash or by certified or official  bank check payable to the order of the Company
equal to the applicable aggregate Exercise Price for the number of Common Shares
specified in such Exercise  Notice (as such exercise number shall be adjusted to
reflect any adjustment in the total number of shares of Common Stock issuable to
the  Holder per the terms of this  Option)  and the Holder  shall  thereupon  be
entitled to receive the number of duly  authorized,  validly issued,  fully-paid
and  non-assessable  shares of Common Stock (or Other Securities)  determined as
provided herein.

               (b) Notwithstanding any provisions herein to the contrary, in the
event there is no effective  registration  statement  with respect to the shares
issuable  upon  exercise  of this Option or a Default or an Event of Default (as
such terms are  defined in the  Security  Agreement  dated as of the date hereof
among  the  Holder  and the  Company,  as  amended,  modified,  restated  and/or
supplemented  from time to time) has  occurred  and is  continuing,  if the Fair
Market Value of one share of Common Stock is greater than the Exercise Price (at
the date of calculation as set forth below),  in lieu of exercising  this Option
for  cash,  the  Holder  may  elect to  receive  shares  equal to the  value (as
determined  below) of this Option (or the portion  thereof  being  exercised) by
surrender of this Option at the  principal  office of the Company  together with
the properly  endorsed Exercise Notice in which event the Company shall issue to
the  Holder a number  of shares of Common  Stock  computed  using the  following
formula:

         X=Y       (A-B)
                   -----
                     A

                                      -4-

<PAGE>

     Where X =  the number  of shares of Common Stock to be issued to the Holder

     Y =        the number  of shares  of  Common  Stock  purchasable  under the
                Option under the Option or,  if only a portion of the  Option is
                being exercised,  the portion of the Option being exercised  (at
                the date of such calculation)

     A =        the Fair Market Value of one share of the Company's Common Stock
                (at the date of such calculation)

     B =        Exercise Price (as adjusted to the date of such calculation)

     3.  Effect  of   Reorganization,   Etc.;   Adjustment  of  Exercise  Price.
         ----------------------------------------------------------------------

               3.1  Reorganization,  Consolidation,  Merger, Etc. In case at any
                    --------------------------------------------
time or from time to time,  the Company shall (a) effect a  reorganization,  (b)
consolidate  with or  merge  into  any  other  person,  or (c)  transfer  all or
substantially all of its properties or assets to any other person under any plan
or arrangement  contemplating the dissolution of the Company, then, in each such
case,  as a condition  to the  consummation  of such a  transaction,  proper and
adequate  provision  shall be made by the Company  whereby  the  Holder,  on the
exercise  hereof as provided in Section 1 at any time after the  consummation of
such  reorganization,  consolidation  or  merger or the  effective  date of such
dissolution,  as the case may be, shall receive, in lieu of the Common Stock (or
Other  Securities)  issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property  (including cash) to
which  such  Holder  would  have  been  entitled  upon such  consummation  or in
connection  with such  dissolution,  as the case may be, if such  Holder  had so
exercised  this  Option,  immediately  prior  thereto,  all  subject  to further
adjustment thereafter as provided in Section 4.

               3.2  Dissolution.  In the event of any dissolution of the Company
                    -----------
following the transfer of all or substantially  all of its properties or assets,
the Company,  concurrently with any distributions  made to holders of its Common
Stock,  shall at its expense  deliver or cause to be delivered to the Holder the
stock and other  securities  and property  (including  cash,  where  applicable)
receivable  by the Holder  pursuant to Section  3.1,  or, if the Holder shall so
instruct the  Company,  to a bank or trust  company  specified by the Holder and
having  its  principal  office in New York,  NY as trustee  for the Holder  (the
"Trustee").

               3.3   Continuation   of   Terms.    Upon   any    reorganization,
                     -------------------------
consolidation,  merger or transfer (and any dissolution  following any transfer)
referred  to in this  Section 3, this  Option  shall  continue in full force and
effect and the terms hereof shall be applicable to the shares of stock and other
securities  and  property  receivable  on the  exercise of this Option after the
consummation of such  reorganization,  consolidation  or merger or the effective
date of dissolution  following any such transfer,  as the case may be, and shall
be binding upon the issuer of any such stock or other securities,  including, in
the case of any such transfer,  the person acquiring all or substantially all of
the  properties or assets of the Company,  whether or not such person shall have
expressly

                                      -5-

<PAGE>

assumed the terms of this Option.  In the event this Option does not continue in
full force and effect after the  consummation of the  transactions  described in
this Section 3, then the  Company's  securities  and property  (including  cash,
where  applicable)  receivable by the Holders will be delivered to Holder or the
Trustee as contemplated by Section 3.2.

     4.  Extraordinary  Events  Regarding  Common  Stock.  In the event that the
         -----------------------------------------------
Company shall (a) issue  additional  shares of the Common Stock as a dividend or
other  distribution on outstanding Common Stock or any preferred stock issued by
the Company,  (b)  subdivide  its  outstanding  shares of Common  Stock,  or (c)
combine  its  outstanding  shares of the Common  Stock into a smaller  number of
shares of the Common Stock,  then, in each such event, the Exercise Price shall,
simultaneously  with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number of
shares of  Common  Stock  outstanding  immediately  prior to such  event and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  after such event,  and the product so obtained shall  thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted,  shall be
readjusted  in the same manner upon the  happening  of any  successive  event or
events  described herein in this Section 4. The number of shares of Common Stock
that the Holder shall thereafter,  on the exercise hereof as provided in Section
1, be entitled to receive shall be increased or decreased,  as applicable,  to a
number determined by multiplying the number of shares of Common Stock that would
otherwise  (but  for the  provisions  of this  Section  4) be  issuable  on such
exercise by a fraction of which (a) the  numerator  is the  Exercise  Price that
would otherwise (but for the provisions of this Section 4) be in effect, and (b)
the denominator is the Exercise Price in effect on the date of such exercise.

     5.  Certificate  as to  Adjustments.  In  each  case of any  adjustment  or
         -------------------------------
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Option, the Company at its expense will promptly cause its Chief
Financial  Officer or other  appropriate  designee to compute such adjustment or
readjustment  in  accordance  with  the  terms  of  the  Option  and  prepare  a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Exercise Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Option,  in effect  immediately  prior to such adjustment or readjustment and as
adjusted or  readjusted as provided in this Option.  The Company will  forthwith
mail a copy of each such  certificate  to the Holder and any Option agent of the
Company  (appointed  pursuant to Section 10 hereof).

     6. Reservation of Stock, Etc.,  Issuable on Exercise of Option. The Company
        -----------------------------------------------------------
will at all times reserve and keep  available,  solely for issuance and delivery
on the  exercise  of the  Option,  all of the  shares of Common  Stock (or Other
Securities)  from  time to time  issuable  on the  exercise  of the  Option.

                                      -6-

<PAGE>

     7.  Assignment;  Exchange of Option.  Subject to compliance with applicable
         -------------------------------
securities  laws,  this  Option,   and  the  rights  evidenced  hereby,  may  be
transferred  by any  registered  holder hereof (a  "Transferor")  in whole or in
part.  On the  surrender  for  exchange of this  Option,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement  Form") and together with evidence  reasonably  satisfactory  to the
Company  demonstrating  compliance with applicable  securities laws, which shall
include,  without  limitation,  the  provision  of  a  legal  opinion  from  the
Transferor's  counsel (at the  Company's  expense)  that such transfer is exempt
from the  registration  requirements  of applicable  securities  laws,  and with
payment by the  Transferor  of any  applicable  transfer  taxes)  will issue and
deliver to or on the order of the Transferor thereof a new Option of like tenor,
in the  name  of the  Transferor  and/or  the  transferee(s)  specified  in such
Transferor  Endorsement Form (each a "Transferee"),  calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Option so surrendered by the Transferor.

        8. Replacement of Option. On receipt of evidence reasonably satisfactory
           ---------------------
to the Company of the loss, theft, destruction or mutilation of this Option and,
in the case of any such loss,  theft or destruction of this Option,  on delivery
of an indemnity agreement or security reasonably satisfactory in form and amount
to the  Company  or,  in the  case of any  such  mutilation,  on  surrender  and
cancellation  of this  Option,  the  Company at its  expense  will  execute  and
deliver,  in lieu thereof,  a new Option of like tenor.

     9. Registration  Rights.  The Holder has been granted certain  registration
        --------------------
rights by the Company. These registration rights are set forth in a Registration
Rights Agreement  entered into by the Company and Holder as of June 25, 2005 and
amended as of and through the date hereof.

     10. Option Agent.  The Company may, by written notice to each Holder of the
         ------------
Option,  appoint  an agent for the  purpose of  issuing  Common  Stock (or Other
Securities)  on the  exercise of this Option  pursuant to Section 1,  exchanging
this Option pursuant to Section 7, and replacing this Option pursuant to Section
8, or any of the  foregoing,  and  thereafter  any such  issuance,  exchange  or
replacement, as the case may be, shall be made at such office by such agent.

     11.  Transfer on the Company's  Books.  Until this Option is transferred on
          --------------------------------
the books of the Company,  the Company may treat the registered holder hereof as
the absolute  owner hereof for all purposes,  notwithstanding  any notice to the
contrary.

     12.  Notices, Etc. All notices and other communications from the Company to
          -------------
the Holder shall be mailed by first class registered or certified mail,  postage
prepaid, at such address as may have been furnished to the Company in writing by
such Holder or, until any such Holder furnishes to the Company an address,  then
to, and at the address of, the last  Holder who has so  furnished  an address to
the Company.

     13. Miscellaneous.  THIS OPTION AND ANY TERM HEREOF MAY BE CHANGED, WAIVED,
         -------------
DISCHARGED  OR TERMINATED  ONLY BY AN INSTRUMENT IN WRITING  SIGNED BY THE PARTY
AGAINST WHICH

                                      -7-

<PAGE>

ENFORCEMENT OF SUCH CHANGE,  WAIVER,  DISCHARGE OR  TERMINATION IS SOUGHT.  THIS
OPTION SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF STATE
OF NEW YORK  WITHOUT  REGARD TO  PRINCIPLES  OF  CONFLICTS  OF LAWS.  Any action
brought concerning the transactions contemplated by this Option shall be brought
only in the state  courts of New York or in the  federal  courts  located in the
state of New York; provided,  however,  that the Holder may choose to waive this
provision  and bring an action  outside the state of New York.  The  individuals
executing  this  Option  on  behalf  of  the  Company  agree  to  submit  to the
jurisdiction of such courts and waive trial by jury. The prevailing  party shall
be entitled to recover from the other party its reasonable  attorney's  fees and
costs.   In  the  event  that  any  provision  of  this  Option  is  invalid  or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified to conform  with such statute or rule of law. Any such
provision  which  may prove  invalid  or  unenforceable  under any law shall not
affect the validity or enforceability of any other provision of this Option. The
headings in this Option are for purposes of reference  only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or  unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any  other  provision  hereof.  The  Company  acknowledges  that  legal  counsel
participated in the preparation of this Option and,  therefore,  stipulates that
the  rule of  construction  that  ambiguities  are to be  resolved  against  the
drafting  party  shall not be applied in the  interpretation  of this  Option to
favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                      -8-

<PAGE>

     IN WITNESS  WHEREOF,  the Company has  executed  this Option as of the date
first written above.

                                     WINDSWEPT ENVIRONMENTAL GROUP, INC.

WITNESS:
                                     By:    /s/Michael O'Reilly
                                           -------------------------------
/s/Arthur Wasserspring                      Name:  Michael O'Reilly
-----------------------------                      -----------------------
                                            Title: President
                                                   -----------------------

                                      -9-

<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Options)

TO:  Windswept Environmental Group, Inc.

     Attention:  Chief Financial Officer

     The  undersigned,  pursuant  to the  provisions  set forth in the  attached
Option (No.     ), hereby irrevocably elects to purchase (check applicable box):
           -----

--------        -------- shares of the Common Stock covered by such Option; or

--------        the  maximum  number  of  shares of Common Stock covered by such
                Option  pursuant to the cashless exercise procedure set forth in
                Section 2.

     The undersigned  herewith makes payment of the full Exercise Price for such
shares  at  the  price  per  share  provided  for  in  such  Option,   which  is
$           . Such payment takes the form of (check applicable box or boxes):
 -----------

--------        $          in lawful money of the United States; and/or
                 ---------

--------        the cancellation of such  portion  of  the attached Option as is
                exercisable for a total of        shares of Common  Stock (using
                                           ------
                a Fair Market Value of $        per  share  for purposes of this
                                        -------
                calculation); and/or

--------        the  cancellation of such number of shares of Common Stock as is
                necessary,  in accordance with  the formula set forth in Section
                2.2, to exercise  this Option with respect to the maximum number
                of shares of Common  Stock  purchasable pursuant to the cashless
                exercise procedure set forth in Section 2.

     The undersigned requests that the certificates for such shares be issued in
the name of, and delivered to                                              whose
                              --------------------------------------------
address is                                                         .
           --------------------------------------------------------

<PAGE>

     The  undersigned  represents  and warrants that all offers and sales by the
undersigned of the securities  issuable upon exercise of the within Option shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933,  as amended  (the  "Securities  Act") or  pursuant  to an  exemption  from
registration under the Securities Act.

Dated:
      -------------------------        -------------------------------------
                                       (Signature must conform to name of Holder
                                       as specified on the face of the Option)

                                       Address:
                                               ------------------------------

                                               ------------------------------

<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                    (To Be Signed Only On Transfer Of Option)

     For value received,  the undersigned hereby sells,  assigns,  and transfers
unto the  person(s)  named  below  under  the  heading  "Transferees"  the right
represented by the within Option to purchase the percentage and number of shares
of Common Stock of Windswept  Environmental  Group,  Inc.  into which the within
Option relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively,  opposite the name(s) of such person(s) and appoints
each such  person  Attorney  to transfer  its  respective  right on the books of
Windswept  Environmental  Group,  Inc.  with full power of  substitution  in the
premises.

                                                 Percentage          Number
Transferees            Address                   Transferred       Transferred
-----------            -------                   -----------       -----------

------------------     -----------------------   -----------       -----------

------------------     -----------------------   -----------       -----------

------------------     -----------------------   -----------       -----------

------------------     -----------------------   -----------       -----------

Dated
     ----------------------------        -----------------------------------
                                         (Signature must conform to name of
                                         Holder as specified on the face of the
                                         Option)

                                         Address:
                                                 ---------------------------

                                                 ---------------------------

                                         SIGNED IN THE PRESENCE OF:

                                         -----------------------------------
                                                      (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

-----------------------------
           (Name)EXHIBIT
      4.1

     

    JAVELIN
      PHARMACEUTICALS, INC.

    

    2005
      OMNIBUS STOCK INCENTIVE PLAN (AS AMENDED AND RESTATED)

     

    This
      2005
      Omnibus Stock Incentive Plan (the “Plan”)
      is
      established by Javelin Pharmaceuticals, Inc., a Delaware corporation (the
“Company”),
      effective as of July 28, 2005 (the “Effective
      Date”),
      and
      may be amended from time to time.

     

    1.     Purpose.
      The
      Plan is intended to provide qualifying Employees, Directors and Consultants
      with
      equity ownership in the Company and its Subsidiaries, thereby strengthening
      their commitment to the success of the Company, promoting the identity of
      interests between the Company’s shareholders and such Employees, Directors and
      Consultants and stimulating their efforts on behalf of the Company, and to
      assist the Company in attracting and retaining talented personnel.

     

    2.     Scope
      of the Plan.
      Subject
      to adjustment as set forth in accordance with Section 22, the total number
      of
      Shares which may be issued pursuant to Awards under the Plan is 7,500,000,
      and
      to the extent consistent with Section 424 of the Code, not more than 4,500,000
      Shares may be issued under ISOs. In accordance with the requirements of Section
      162(m) of the Code, the number of Shares for which Awards may be granted to
      any
      individual Grantee in any calendar year shall not exceed 1,000,000. If any
      Shares subject to any Award granted hereunder are forfeited or such Award
      otherwise terminates without the issuance of such Shares or for other
      consideration in lieu of such Shares, the Shares subject to such Award, to
      the
      extent of any such forfeiture or termination, shall again be available for
      grant
      under the Plan. If any outstanding ISOs under the Plan for any reason expire
      or
      are terminated, the Shares allocable to the unexercised portion of all of such
      ISOs may again be subject to the ISOs under the Plan. Shares awarded under
      the
      Plan may be treasury shares or newly-issued shares.

     

    3.     Administration.

     

    (a)     Committee.
      Except
      with respect to Section 7 below (Automatic Option Grants), the Plan shall be
      administered by a Committee which shall consist of at least two or more members
      of the Board, all of whom, may qualify as “outside directors” as defined for
      purposes of the regulations under Section 162(m) of the Code and as
“non-Employee directors” under Section (b)(3)(i) of Rule 16b-3. Upon listing the
      Shares on any national securities exchange or the Nasdaq system, the members
      of
      the Committee must then also meet the requirements of any such exchange or
      Nasdaq system. The number of members of the Committee shall from time to time
      be
      increased or decreased, and shall be subject to such conditions, in each case
      as
      the Board deems appropriate to permit transactions in Shares pursuant to the
      Plan to satisfy such conditions of Rule 16b-3 and Section 162(m) of the Code
      as
      then in effect. Notwithstanding anything to the contrary in this Plan, the
      Committee may be comprised of the entire Board. The Automatic Option Grant
      Program described in Section 7 below shall be self-executing in accordance
      with
      its terms, and the Committee shall not exercise any discretionary authority
      with
      respect to any grants made under that program.

     

    (b)     Authority.
      Subject
      to the express provisions of the Plan, the Committee has full and final
      authority and discretion as follows:

     

    (i)     to
      determine when and to whom Awards should be granted and the terms, conditions
      and restrictions applicable to each Award, including, without limitation, (A)
      the exercise price of the Award, (B) the method of payment for Shares purchased
      upon the exercise of the Award, (C) the method of satisfaction of any tax
      withholding obligation arising in connection with the

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Award,
      (D) the timing, terms and conditions of the exercisability of the Award or
      the
      vesting of any Shares acquired upon the exercise thereof, (E) the time of the
      expiration of the vesting of any Shares acquired upon the exercise thereof,
      (F)
      the effect of the Grantee’s termination of employment or service with the
      Company on any of the foregoing, (G) all other terms, conditions and
      restrictions applicable to the Award or such Shares not inconsistent with the
      terms of the Plan, (H) the benefit payable under any SAR or Performance Share,
      and (I) whether or not specific Awards shall be identified with other specific
      Awards, and if so whether they shall be exercisable cumulatively with, or
      alternatively to, such other specific Awards;

     

    (ii)    to
      determine the amount, if any, that a Grantee shall pay for Restricted Shares,
      whether to permit or require the payment of cash dividends thereon to be
      deferred and the terms related thereto, when Restricted Shares (including
      Restricted Shares acquired upon the exercise of any Award) shall be forfeited
      and whether such Shares shall be held in escrow;

     

    (iii)   to
      interpret the Plan and to make all determinations necessary or advisable for
      the
      administration of the Plan;

     

    (iv)   to
      make,
      amend and rescind rules, guidelines and policies relating to the Plan, or to
      adopt supplements to, or alternative versions of the Plan, including, without
      limitation, rules with respect to the exercisability and forfeitability of
      Awards upon the termination of employment or service of a Grantee;

     

    (v)    to
      determine the terms, conditions and restrictions of all Award Agreements (which
      need not be identical) and, with the consent of the Grantee, to amend any such
      Award Agreement at any time, among other things, to permit transfers of such
      Awards to the extent permitted by the Plan, except that the consent of the
      Grantee shall not be required for any amendment which (A) does not adversely
      affect the rights of the Grantee or (B) is necessary or advisable (as determined
      by the Committee) to carry out the purpose of the Award as a result of any
      change in applicable law;

     

    (vi)   to
      cancel, with the consent of the Grantee, outstanding Awards and to grant new
      Awards in substitution therefor;

     

    (vii)    
      to
      accelerate the exercisability of, and to accelerate or waive any or all of
      the
      terms, conditions and restrictions applicable to, any Award or any group of
      Awards for any reason and at any time, including in connection with a
      termination of employment (other than for Cause);

     

    (viii)  subject
      to Section 6(c), to extend the time during which any Award or group of Awards
      may be exercised;

     

    (ix)    to
      have
      the Award either comply with Section 409A of the Code or not result in the
      deferral of compensation within the meaning of said Section 409A;

     

    (x)      
      to
      make
      such adjustments or modifications to Awards to Grantees working outside the
      United States as are advisable to fulfill the purposes of the Plan;

     

    (xi)      
      to
      impose
      such additional terms, conditions and restrictions upon the grant, exercise
      or
      retention of Awards as the Committee may, before or concurrent with the grant
      thereof, deem appropriate; and

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (xii)  
to
      take
      any other action with respect to any matters relating to the Plan for which
      it
      is responsible.

     

    The
      determination of the Committee on all matters relating to the Plan or any Award
      Agreement shall be final.

     

    4.     Indemnification
      and Reimbursement.
      Service
      as a member of the Committee or any other duly appointed committee shall
      constitute service as a Board member, and such members shall accordingly be
      entitled to full indemnification and reimbursement as Board members for their
      service as members of the Committee or any other duly appointed committee.
      Neither the Committee nor any duly appointed committee member shall be liable
      for any act or omission made in good faith with respect to the Plan or any
      Award
      granted under the Plan.

     

    5.     Eligibility.
      The
      Committee may, in its discretion, grant Awards to any Eligible Person, whether
      or not he or she has previously received an Award, except in the case of (a)
      an
      ISO, which can only be granted to an Employee of the Company or any Subsidiary
      and (b) the Automatic Option Grant Program described in Section 7 below, which
      shall be self-executing. The individuals who shall be eligible to participate
      in
      the Automatic Option Grant Program shall be limited to (i) those
      individuals who first become non-employee Directors, whether through appointment
      by the Board or election by the Company’s stockholders, and (ii) those
      individuals who continue to serve as non-employee Directors. A non-employee
      Director who has previously been employed by the Company (or any parent or
      Subsidiary) shall not be eligible to receive an option grant under the Automatic
      Option Grant Program at the time he or she first becomes a non-employee
      Director, but shall be eligible to receive periodic option grants under the
      Automatic Option Grant Program while he or she continues to serve as a
      non-employee Director.

     

    6.     Conditions
      to Grants.

     

    (a)     General
      Conditions.
      Awards
      shall be evidenced by written Award Agreements specifying the number of Shares
      covered thereby, in such form as the Committee shall from time to time
      establish. To the extent consistent with Section 3(b), Award Agreements may
      incorporate all or any of the terms of the Plan by reference and shall comply
      with and be subject to the following terms and conditions:

     

    (i)     The
      Grant
      Date of an Award shall be the date on which the Committee grants the Award
      or
      such later date as specified in advance by the Committee;

     

    (ii)    In
      the
      case of an Award of options, the Option Term shall under no circumstances extend
      more than ten (10) years after the Grant Date and shall be subject to earlier
      termination as herein provided and as provided in the applicable Award
      Agreement; and

     

    (iii)   Any
      terms
      and conditions of an Award not set forth in the Plan shall be set forth in
      the
      Award Agreement related to that Award.

     

    (b)     Grant
      of Options.
      No
      later than the Grant Date of any option, the Committee shall determine the
      Option Price of such option. Subject to Section 6(c), the Option Price of an
      option may be not less than the Fair Market Value of a Share on the Grant Date.
      An option shall be exercisable for unrestricted Shares, unless the Award
      Agreement provides that it is exercisable for Restricted Shares.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (c)     Grant
      of ISOs.
      At the
      time of the grant of any option, the Committee may, in its discretion, designate
      that such option shall be made subject to additional restrictions to permit
      the
      option to qualify as an “incentive stock option” under the requirements of
      Section 422 of the Code. Any option designated as an ISO:

     

    (i)     shall
      have an Option Price that is not less than the Fair Market Value of a Share
      on
      the Grant Date and, if granted to a Ten Percent Owner, have an Option Price
      that
      is not less than 110% of the Fair Market Value of a Share on the Grant
      Date;

     

    (ii)    shall
      be
      for a period of not more than ten (10) years and, if granted to a Ten Percent
      Owner, not more than five (5) years, from the Grant Date and shall be subject
      to
      earlier termination as provided herein or in the applicable Award
      Agreement;

     

    (iii)   shall
      meet the limitations of this subparagraph 6(c)(iii). If the aggregate Fair
      Market Value of Shares with respect to which ISOs first become exercisable
      by a
      Grantee in any calendar year exceeds the limit determined in accordance with
      the
      provisions of Section 422 of the Code (the “Limit”)
      taking
      into account Shares subject to all ISOs granted by the Company which are held
      by
      the Grantee, the excess will be treated as nonqualified options. To determine
      whether the Limit is exceeded, the Fair Market Value of Shares subject to
      options shall be determined as of the Grant Dates of the options. In reducing
      the number of options treated as ISOs to meet the Limit, the most recently
      granted options will be reduced first. If a reduction of simultaneously granted
      options is necessary to meet the Limit, the Committee may designate which Shares
      are to be treated as Shares acquired pursuant to an ISO;

     

    (iv)   shall
      be
      granted within ten (10) years from the Effective Date;

     

    (v)    shall
      require the Grantee to notify the Committee of any disposition of any Shares
      issued upon the exercise of the ISO under the circumstances described in Section
      421(b) of the Code (relating to certain disqualifying dispositions, a
“Disqualifying
      Disposition”),
      within ten (10) business days after such Disqualifying Disposition;
      and

     

    (vi)   unless
      otherwise permitted by the Code, shall by its terms not be assignable or
      transferable other than by will or by the laws of descent and distribution
      and
      may be exercised, during the Grantee’s lifetime, only by the Grantee, except
      that the Grantee may, in accordance with Section 7, designate in writing a
      beneficiary to exercise his or her ISOs after the Grantee’s death.

     

    (d)     Grant
      of SARs.

     

    (i)     When
      granted, SARs may, but need not, be identified with a specific option, specific
      Restricted Shares or specific Performance Shares of the Grantee (including
      any
      option, Restricted Shares or Performance Shares granted on or before the Grant
      Date of the SARs) in a number equal to or different from the number of SARs
      so
      granted. If SARs are identified with Shares subject to an option, with
      Restricted Shares or with Performance Shares, then, unless otherwise provided
      in
      the applicable Award Agreement, the Grantee’s associated SARs shall terminate
      upon (A) the expiration, termination, forfeiture, or cancellation of such
      option, Restricted Shares or Performance Shares, (B) the exercise of such option
      or Performance Shares or (C) the date such Restricted Shares become
      nonforfeitable.

     

    (ii)    The
      Strike Price of any SAR shall equal, for any SAR that is identified with an
      option, the Option Price of such option, or for any other SAR, one hundred
      percent (100%) of the Fair Market Value of a Share on the Grant Date of such
      SAR, except that the Committee

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    may
      (A)
      specify a higher Strike Price in the Award Agreement or (B) provide that the
      benefit payable upon exercise of any SAR shall not exceed such percentage of
      the
      Fair Market Value of a Share on such Grant Date as the Committee shall
      specify.

     

    (e)     Grant
      of Performance Shares.

     

    (i)     Before
      the grant of Performance Shares, the Committee shall:

     

    (A)     determine
      objective performance goals, which may, but need not, consist of any one or
      more
      of the following goals deemed appropriate by the Committee: certain scientific
      milestones, earnings (either in the aggregate or on a per share basis),
      operating income, cash flow, EBITDA (earnings before interest, taxes,
      depreciation and amortization), return on equity, indices related to EVA
      (economic value added), per share rate of return on the Common Stock (including
      dividends), market share (in one or more markets), customer retention rates,
      market penetration rates, revenues, reductions in expense levels and the
      attainment by the Common Stock of a specified market value for a specified
      period of time, in each case where applicable to be determined either on a
      company-wide basis or in respect of any one or more business units, and the
      amount of compensation under the goals applicable to such grant;

     

    (B)    designate
      a period for the measurement of the extent to which performance goals are
      attained, which may begin prior to the Grant Date (the “Performance
      Period”);
      and

     

    (C)    assign
      a
      performance percentage to each level of attainment of performance goals during
      the Performance Period, with the percentage applicable to minimum attainment
      being zero percent and the percentage applicable to maximum attainment to be
      determined by the Committee from time to time (the “Performance
      Percentage”).

     

    (ii)    If
      a
      Grantee is promoted, demoted, or transferred to a different business unit of
      the
      Company during a Performance Period, then, to the extent the Committee
      determines any one or more of the performance goals, Performance Period, or
      Performance Percentage are no longer appropriate, the Committee may make any
      changes thereto as it deems appropriate in order to make them
      appropriate.

     

    (iii)   When
      granted, Performance Shares may, but need not, be identified with Shares subject
      to a specific option, specific Restricted Shares, or specific SARs of the
      Grantee granted under the Plan in a number equal to or different from the number
      of the Performance Shares so granted. If Performance Shares are so identified,
      then, unless otherwise provided in the applicable Award Agreement, the Grantee’s
      associated Performance Shares shall terminate upon (A) the expiration,
      termination, forfeiture, or cancellation of the option, Restricted Shares,
      or
      SARs with which the Performance Shares are identified, (B) the exercise of
      such
      option or SARs or (C) the date Restricted Shares become
      nonforfeitable.

     

    (f)     Grant
      of Restricted Shares.

     

    (i)     The
      Committee shall determine the amount, if any, that a Grantee shall pay for
      Restricted Shares, subject to the following sentence. Except with respect to
      Restricted Shares that are treasury shares, for which no payment need be
      required, the Committee shall require the Grantee to pay at least the Minimum
      Consideration for each Restricted Share. Such payment shall be made in full
      by
      the Grantee before the delivery of the shares and in any event no later than
      ten
      (10) business days after the Grant Date.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (ii)    The
      Committee may, but need not, provide that all or any portion of a Grantee’s
      Restricted Shares, or Restricted Shares acquired upon exercise of an option,
      shall be forfeited:

     

    (A)    except
      as
      otherwise specified in the Plan or the Award Agreement, upon the termination
      of
      Grantee’s employment with, or Service to, the Company within a specified time
      period after the Grant Date;

     

    (B)     if
      the
      Company or the Grantee does not achieve specified performance goals (if any)
      within a specified time period after the Grant Date and before the Grantee’s
      termination of employment or service; or

     

    (C)     upon
      failure to satisfy such other conditions, or Grantee’s breach of specific
      conditions, as the Committee may specify in the Award Agreement.

     

    (iii)   If
      Restricted Shares are forfeited and the Grantee was required to pay for such
      shares or acquired such Restricted Shares upon the exercise of an option, the
      Grantee shall be deemed to have resold such Restricted Shares to the Company
      at
      a price equal to the lesser of (A) the amount paid by the Grantee for such
      Restricted Shares and (B) the Fair Market Value of the Restricted Shares on
      the
      date of forfeiture, which shall be paid to the Grantee in cash as soon as
      administratively practicable. Such Restricted Shares shall cease to be
      outstanding and shall no longer confer on the Grantee thereof any rights as
      a
      shareholder of the Company, from and after the date of the event causing the
      forfeiture, whether or not the Grantee accepts the Company’s tender of payment
      for such Restricted Shares.

     

    (iv)   The
      Committee may provide that the certificates for any Restricted Shares (A) shall
      be held (together with a stock power executed in blank by the Grantee) in escrow
      by the Secretary of the Company until such Restricted Shares become
      nonforfeitable or are forfeited or (B) shall bear an appropriate legend
      restricting the transfer of such Restricted Shares. If any Restricted Shares
      become nonforfeitable, the Company shall cause certificates for such shares
      to
      be issued without such legend.

     

    (g)    Grant
      of Stock Bonuses.
      The
      Committee may grant Bonus Shares to any Eligible Person.

     

    7.     Automatic
      Option Grant Program.

     

    (a)     Option
      Terms.

     

    (i)     Grant
      Dates.
      Option
      grants shall be made on the dates specified below:

     

    (A)      
      Each
      individual who is first elected or appointed as a non-employee Director shall
      automatically be granted, on the date of such initial election or appointment,
      a
      non-statutory option to purchase 50,000 Shares, provided that individual has
      not
      been in the employment of the Company or any parent or Subsidiary within two
      (2)
      years prior to becoming a non-employee Director.

     

    (B)     In
      the
      first quarter of the calendar year immediately following the calendar year
      in
      which an individual is first elected or appointed as a non-employee Director,
      and each year thereafter that he or she remains a non-employee Director, he
      or
      she shall

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    automatically
      be granted an annual non-statutory option to purchase 25,000 Shares. This
      automatic annual grant may be awarded on a triennial basis for the purchase
      of
      75,000 Shares, provided that no annual automatic grant shall be made to such
      non-employee Director for each of the two (2) succeeding years. Further, in
      consideration of each year’s service on a committee of the Board, a non-employee
      Director shall automatically be granted a non-statutory option for the purchase
      of 5,000 Shares for serving on one or more committees of the Board, plus (i)
      an
      additional 5,000 Shares for each committee (other than the Audit Committee)
      for
      which he or she serves as the chair thereof, and an additional 10,000 Shares
      for
      serving as chair of the Audit Committee and (ii) an additional 20,000 Shares
      for
      serving as Chairman of the Board. There shall be no limit on the number of
      such
      share option grants, as applicable, any one non-employee Director may receive
      over his or her period of Board service. Non-employee Directors who have
      previously been in the employment of the Company (or any parent or Subsidiary)
      or who have otherwise received one or more stock option grants from the Company
      prior to the date on which such person first became a non-employee Director
      shall be eligible to receive one or more such annual option grants over their
      period of continued Board service as provided herein.

     

    (ii)    Exercise
      Price.

     

    (A)     The
      exercise price per share shall be equal to one hundred percent (100%) of the
      Fair Market Value per Share on the option grant date.

     

    (B)     The
      exercise price shall be payable as set forth in Section 9 below.

     

    (iii)   Option
      Term.
      Each
      option shall have a term of ten (10) years measured from the option grant
      date.

     

    (iv)   Exercise
      and Vesting of Options.
      The
      Shares subject to the options granted to the non-employee Directors pursuant
      to
      this Section 7 shall vest in one installment upon the optionee’s completion of
      the one (1)-year period of service measured from the grant date, provided that
      Shares subject to options granted on a triennial basis shall vest one-third
      a
      year after one (1) year and the optionee is in continued Board service on the
      vesting date, subject to clause (vi) below. Upon any Shares becoming vested,
      the
      option for such Shares shall be immediately exercisable for any or all of such
      vested Shares.

     

    (v)  
Limited
      Transferability of Options.
      Each
      option under this Section 7 may be assigned in whole or in part during the
      optionee’s lifetime to one or more members of the optionee’s family or to a
      trust established exclusively for one or more such family members or to
      optionee’s former spouse, to the extent such assignment is in connection with
      the optionee’s estate plan or pursuant to a domestic relations order. The
      assigned portion may only be exercised by the person or persons who acquire
      a
      proprietary interest in the option pursuant to the assignment. The terms
      applicable to the assigned portion shall be the same as those in effect for
      the
      option immediately prior to such assignment and shall be set forth in such
      documents issued to the assignee as the Committee may deem appropriate. The
      optionee may also designate one or more persons as the beneficiary or
      beneficiaries of his or her outstanding options under this Section 7, and those
      options shall, in accordance with such designation, automatically be transferred
      to such beneficiary or beneficiaries upon the optionee’s death while holding
      those options. Such beneficiary or beneficiaries shall take the transferred
      options subject to all the terms and conditions of the applicable agreement
      evidencing each such transferred option, including (without limitation) the
      limited time period during which the option may be exercised following the
      optionee’s death.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (vi)   Termination
      of Board Service.
      The
      following provisions shall govern the exercise of any options held by the
      optionee at the time the optionee ceases to serve as a Director:

     

    (A)     The
      optionee (or, in the event of optionee’s death, the personal representative of
      the optionee’s estate or the person or persons to whom the option is transferred
      pursuant to the optionee’s will or the laws of inheritance or the designated
      beneficiary or beneficiaries of such option) shall have a eighteen (18)-month
      period following the date of such cessation of Board service in which to
      exercise each such option.

     

    (B)     During
      the eighteen (18)-month exercise period, the option may not be exercised in
      the
      aggregate for more than the number of vested Shares for which the option is
      exercisable at the time of the optionee’s cessation of Board
      service.

     

    (C)     Should
      the optionee cease to serve as a Director by reason of death or Disability,
      then
      all shares at the time subject to the option shall immediately vest so that
      such
      option may, during the eighteen (18)-month exercise period following such
      cessation of Board service, be exercised for any or all of those shares as
      fully
      vested Shares.

     

    (D)     In
      no
      event shall the option remain exercisable after the expiration of the option
      term. Upon the expiration of the eighteen (18)-month exercise period or (if
      earlier) upon the expiration of the option term, the option shall terminate
      and
      cease to be outstanding for any vested shares for which the option has not
      been
      exercised. However, the option shall, immediately upon the optionee’s cessation
      of Board service for any reason other than death or Disability, terminate and
      cease to be outstanding to the extent the option is not otherwise at that time
      exercisable for vested shares.

     

    (b)     Corporate
      Transaction.

     

    (i)     In
      the
      event of a Corporation Transaction (as described in Section 13 below) while
      the
      optionee remains a Director, the Shares at the time subject to each outstanding
      option held by such optionee under this Automatic Option Grant Program but
      not
      otherwise vested shall automatically vest in full so that each such option
      shall, immediately prior to the effective date of the Corporate Transaction,
      become exercisable for all the option shares as fully vested Shares and may
      be
      exercised for any or all of those vested shares. Immediately following the
      consummation of the Corporate Transaction, each automatic option grant shall
      terminate and cease to be outstanding, except to the extent assumed by the
      successor corporation (or parent thereof) or otherwise continued in effect
      pursuant to the terms of the Corporate Transaction.

     

    (ii)    In
      the
      event of a Corporate Transaction, all outstanding repurchase rights under this
      under this Automatic Option Grant Program shall automatically terminate, and
      the
      Shares subject to those terminated rights shall immediately vest in
      full.

     

    (iii)   Upon
      the
      occurrence of a Hostile Tender-Offer while the optionee remains a Director,
      such
      optionee shall have a thirty (30)-day period in which to surrender to the
      Company each of his or her outstanding options under this Automatic Option
      Grant
      Program. The optionee shall in return be entitled to a cash distribution from
      the Company in an amount equal to the excess of (i) the Tender-Offer Price
      of
      the Shares at the time subject to each surrendered option (whether or not the
      optionee is otherwise at the time vested in those shares) over (ii) the
      aggregate exercise price payable for such shares. Such cash distribution shall
      be paid within five (5) days following the surrender

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    of
      the
      option to the Company. No approval or consent of the Board or any Committee
      shall be required at the time of the actual option surrender and cash
      distribution.

     

    (iv)   Each
      option which is assumed in connection with a Corporate Transaction or otherwise
      continued in effect shall be appropriately adjusted, immediately after such
      Corporate Transaction, to apply to the number and class of securities which
      would have been issuable to the optionee in consummation of such Corporate
      Transaction had the option been exercised immediately prior to such Corporate
      Transaction. Appropriate adjustments shall also be made to the exercise price
      payable per share under each outstanding option, provided the aggregate exercise
      price payable for such securities shall remain the same. To the extent the
      actual holders of the Company’s outstanding Common Stock receive cash
      consideration for their Common Stock in consummation of the Corporate
      Transaction, the successor corporation may, in connection with the assumption
      of
      the outstanding options under the Automatic Option Grant Program, substitute
      one
      or more shares of its own common stock with a fair market value equivalent
      to
      the cash consideration paid per share of Common Stock in such Corporate
      Transaction.

     

    (v)    The
      grant
      of options under the Automatic Option Grant Program shall in no way affect
      the
      right of the Company to adjust, reclassify, reorganize or otherwise change
      its
      capital or business structure or to merge, consolidate, dissolve, liquidate
      or
      sell or transfer all or any part of its business or assets.

     

    (c)    Remaining
      Terms.
      The
      remaining terms of each option granted under the Automatic Option Grant Program
      shall be the same as the terms in effect for other option grants made under
      the
      Plan.

     

    8.     Transferability.
      Notwithstanding any contrary provision in the Plan, all Awards granted
      hereunder, other than ISOs, may be assigned or transferred by Grantee to (i)
      one
      or more members of Grantee’s Immediate Family; (ii) trusts for the benefit of
      the Grantee and/or Grantee’s Immediate Family; (iii) entities wholly-owned by
      Grantee and/or Grantee’s Immediate Family; (iv) charitable institutions; or (v)
      Grantee’s estate or any person who acquires the right to exercise this Option by
      bequest or inheritance or by reason of Grantee’s death, by will or by the laws
      of descent and distribution. Subject to Section 6(c) in respect of ISOs, a
      Grantee may, if permitted by the Committee, in its discretion, (a) designate
      in
      writing a beneficiary to exercise an Award after his or her death (if that
      designation has been received by the Company prior to the Grantee’s death) and
      (b) transfer the Award to one or more members of the Grantee’s Immediate Family
      or any other individuals or entities.

     

    9.     Exercise.

     

    (a)     Exercise
      of Options.

     

    (i)     Subject
      to Section 6 and except as otherwise provided in the applicable Award Agreement,
      each option shall become exercisable at such time or times as may be specified
      by the Committee from time to time.

     

    (ii)    An
      option
      shall be exercised by the delivery to the Company during the Option Term of
      (A)
      a written notice of intent to purchase a specific number of Shares subject
      to
      the option in accordance with the terms of the option by the person entitled
      to
      exercise the option and (B) payment in full of the Option Price of such specific
      number of Shares in accordance with Section 8(a)(iii).

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (iii)   To
      the
      extent not prohibited by Section 402 of the Sarbanes-Oxley Act of 2002, payment
      of the Option Price may be made by any one or more of the following
      means:

     

    (A)    cash,
      check, or wire transfer;

     

    (B)     with
      the
      approval of the Committee, Mature Shares, valued at their Fair Market Value
      on
      the date of exercise;

     

    (C)     with
      the
      approval of the Committee, Restricted Shares held by the Grantee for at least
      six (6) months prior to the exercise of the option, each such share valued
      at
      the Fair Market Value of a Share on the date of exercise; or

     

    (D)     in
      accordance with procedures previously approved by the Company, through the
      sale
      of the Shares acquired on exercise of the option through a bank or broker-dealer
      to whom the Grantee has submitted an irrevocable notice of exercise and
      irrevocable instructions to deliver promptly to the Company the amount of sale
      or loan proceeds sufficient to pay for such Shares, together with, if requested
      by the Company, the amount of federal, state, local or foreign withholding
      taxes
      payable by Grantee by reason of such exercise.

     

    The
      Committee may in its discretion specify that, if any Restricted Shares are
      used
      to pay the Option Price (“Tendered
      Restricted Shares”),
      (A)
      all the Shares acquired on exercise of the option shall be subject to the same
      restrictions as the Tendered Restricted Shares, determined as of the date of
      exercise of the option or (B) a number of Shares acquired on exercise of the
      option equal to the number of Tendered Restricted Shares shall be subject to
      the
      same restrictions as the Tendered Restricted Shares, determined as of the date
      of exercise of the option.

     

    (b)     Exercise
      of SARs.

     

    (i)     Subject
      to Section 6(d), and except as otherwise provided in the applicable Award
      Agreement, (A) each SAR not identified with any other Award shall become
      exercisable with respect to twenty-five percent (25%) of the Shares subject
      thereto on each of the first four (4) year anniversaries of the Grant Date
      of
      such SAR and (B) each SAR which is identified with any other Award shall become
      exercisable as and to the extent that the Award with which such SAR is
      identified may be exercised or becomes nonforfeitable, as the case may
      be.

     

    (ii)    SARs
      shall be exercised by delivery to the Company of written notice of intent to
      exercise a specific number of SARs. Unless otherwise provided in the applicable
      Award Agreement, the exercise of SARs which are identified with Shares subject
      to an option or Restricted Shares shall result in the cancellation or forfeiture
      of such option or Restricted Shares, as the case may be, to the extent of such
      exercise.

     

    (iii)   The
      benefit for each SAR exercised shall be equal to (A) the Fair Market Value
      of a
      Share on the date of such exercise minus (B) the Strike Price specified in
      such
      SAR. Such benefit shall be payable in cash, except that the Committee may
      provide in the Award Agreement that benefits may be paid wholly or partly in
      Shares.

     

    (c)     Payment
      of Performance Shares.
      Unless
      otherwise provided in the Award Agreement with respect to an Award of
      Performance Shares, if the minimum performance goals applicable to such
      Performance Shares have been achieved during the applicable Performance Period,
      then the Company shall pay to the Grantee of such Award that number of Shares
      equal to the product of:

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (i)     the
      sum
      of (A) number of Performance Shares specified in the applicable Award Agreement
      and (B) the number of Shares that would have been issuable if such Performance
      Shares had been Shares outstanding throughout the Performance Period and the
      stock dividends, cash dividends (except as otherwise provided in the Award
      Agreement) and other property paid in respect of such Shares had been reinvested
      in additional Shares as of each dividend payment date,

     

    (ii)    the
      Performance Percentage achieved during such Performance Period.

     

    The
      Committee may, in its discretion, determine that cash be paid in lieu of some
      or
      all of such Shares. The amount of cash payable in lieu of a Share shall be
      determined by valuing such Share at its Fair Market Value on the business day
      next preceding the date such cash is to be paid. Payments pursuant to this
      Section 8 shall be made as soon as administratively practicable after the end
      of
      the applicable Performance Period. Any Performance Shares with respect to which
      the performance goals shall not have been achieved by the end of the applicable
      Performance Period shall expire.

     

    10.   Notification
      under Section 83(b).
      If the
      Grantee, in connection with the exercise of any option or the grant of
      Restricted Shares, makes the election permitted under Section 83(b) of the
      Code
      to include in such Grantee’s gross income in the year of transfer the amounts
      specified in Section 83(b) of the Code, then such Grantee shall notify the
      Company, in writing, of such election within ten (10) days after filing the
      notice of the election with the Internal Revenue Service, in addition to any
      filing and notification required pursuant to regulations issued under Section
      83(b) of the Code. The Committee may, in connection with the grant of an Award
      or at any time thereafter, prohibit a Grantee from making the election described
      in this Section 9.

     

    11.   Mandatory
      Tax Withholding.

     

    (a)     Whenever
      under the Plan, Shares are to be delivered upon exercise or payment of an Award
      or upon Restricted Shares becoming nonforfeitable, or any other event with
      respect to rights and benefits hereunder, the Company shall be entitled to
      require (i) that the Grantee remit an amount in cash, or in the Company’s
      discretion, Mature Shares or any other form of consideration, sufficient to
      satisfy all federal, state and local tax withholding requirements related
      thereto (“Required
      Withholding”),
      (ii)
      the withholding of such Required Withholding from compensation otherwise due
      to
      the Grantee or from any Shares due to the Grantee under the Plan or (iii) any
      combination of the foregoing.

     

    (b)     Any
      Grantee who makes a Disqualifying Disposition or an election under Section
      83(b)
      of the Code shall remit to the Company an amount sufficient to satisfy all
      resulting Required Withholding, except that in lieu of or in addition to the
      foregoing, the Company shall have the right to withhold such Required
      Withholding from compensation otherwise due to the Grantee or from any Shares
      or
      other payment due to the Grantee under the Plan.

     

    (c)     Any
      surrender by a Section 16 Grantee of previously owned shares of Common Stock
      to
      satisfy tax withholding arising upon exercise of the Award must comply with
      the
      applicable provisions of Rule 16b-3(e).

     

    12.   Elective
      Share Withholding.
      A
      Grantee may, with the prior consent of the Committee, elect the withholding
      by
      the Company of a portion of the Shares otherwise deliverable to such Grantee
      upon the exercise of an Award or upon Restricted Shares becoming nonforfeitable
      (each, a “Taxable
      Event”)
      having
      a Fair Market Value equal to the minimum amount necessary to satisfy the
      Required Withholding liability attributable to the Taxable Event.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    13.   Corporate
      Transactions.
      In the
      event the Board or the stockholders of the Company approve a plan of complete
      liquidation or dissolution of the Company, all options will terminate
      immediately prior to the consummation of such liquidation or dissolution;
      provided, however, that options granted pursuant to the Automatic Option Grant
      Program described in Section 7 above shall be governed by the terms set forth
      in
      Section 7. The Committee may, in its sole discretion, declare that any option
      shall terminate as of a date fixed by the Committee and give each Grantee the
      right to exercise such Grantee’s option as to all or any part of the Shares
      subject thereto, including Shares as to which the option would not otherwise
      be
      exercisable. In the event that the Board or the stockholders of the Company
      approve an agreement for the sale of all or substantially all of the Company’s
      assets or a merger, consolidation or similar transaction in which the Company
      will not be the surviving entity or will survive as a wholly-owned subsidiary
      of
      another entity (each, a “Corporate
      Transaction”),
      the
      option shall be assumed or an equivalent option shall be substituted by such
      successor entity or a parent or subsidiary of such successor entity, unless
      the
      Board determines, in its sole discretion and in lieu of such assumption or
      substitution, to take one of the following two options: (i) fifteen (15) days
      prior to the scheduled consummation of such Corporate Transaction, all options
      shall become immediately vested and exercisable and shall remain exercisable
      for
      a period of fifteen days, or (ii) cancel any outstanding options and pay or
      deliver, or cause to be paid or delivered, to the holder thereof an amount
      in
      cash or securities having a value (as determined by the Board in its sole,
      good
      faith discretion) equal to the product of the number of shares subject to the
      option multiplied by the amount, if any, by which (A) the formula or fixed
      price
      per share paid to holders of shares pursuant to such Corporate Transaction
      exceeds (B) the Option Price applicable to such shares. With respect to the
      Company’s establishment of an exercise window, (i) any exercise of an option
      during such fifteen-day period shall be conditioned upon the consummation of
      the
      contemplated Corporate Transaction and shall be effective only immediately
      before the consummation of such Corporate transaction and (ii) upon consummation
      of such Corporate Transaction, the Plan and all outstanding but unexercised
      options shall terminate. The Board shall send written notice of the Corporate
      Transaction that will result in such a termination to all individuals who hold
      options not later than the time at which the Company gives notice thereof to
      its
      shareholders.

     

    14.   Termination
      of Employment or Service.

     

    (a)     For
      Cause.
      If a
      Grantee’s employment or service is terminated for Cause, (i) the Grantee’s
      Restricted Shares and SARs that are then forfeitable shall thereupon be
      forfeited, subject to the provisions of Section 6(f)(iii) regarding repayment
      of
      certain amounts to the Grantee; and (ii) any unexercised option or Performance
      Share shall terminate effective immediately upon such termination of employment
      or service.

     

    (b)     On
      Account of Death.
      Except
      as otherwise provided by the Committee in the Award Agreement, if a Grantee’s
      employment or service terminates on account of death, then:

     

    (i)     the
      Grantee’s Restricted Shares that were forfeitable shall thereupon become
      nonforfeitable;

     

    (ii)    any
      unexercised option or SAR, to the extent exercisable on the date of such
      termination of employment or service, may be exercised, in whole or in part,
      within the first twelve (12) months after such termination of employment or
      service (but only during the Option Term) by (A) his or her personal
      representative or by the person to whom the option or SAR, as applicable, is
      transferred by will or the applicable laws of descent and distribution, (B)
      the
      Grantee’s designated beneficiary, or (C) a Permitted Transferee; and, to the
      extent that any such option of SAR was not exercisable on the date of such
      termination of employment or service, it will immediately terminate;
      and

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (iii)   any
      unexercised Performance Shares may be exercised in whole or in part, at any
      time
      within six (6) months after such termination of employment or service on account
      of the death of the Grantee, by (A) his or her personal representative or by
      the
      person to whom the Performance Shares are transferred by will or the applicable
      laws of descent and distribution, (B) the Grantee’s designated beneficiary or
      (C) a Permitted Transferee, except that the benefit payable with respect to
      any
      Performance Shares for which the Performance Period has not ended as of the
      date
      of such termination of employment on account of death shall be equal to the
      product of Fair Market Value of such Performance Shares multiplied successively
      by each of the following:

     

    (A)     a
      fraction, the numerator of which is the number of months (including as a whole
      month any partial month) that has elapsed since the beginning of such
      Performance Period until the date of such termination of employment or service
      and the denominator of which is the number of months (including as a whole
      month
      any partial month) in the Performance Period; and

     

    (B)     a
      percentage determined in the discretion of the Committee that would be earned
      under the terms of the applicable Award Agreement assuming that the rate at
      which the performance goals have been achieved as of the date of such
      termination of employment or service would continue until the end of the
      Performance Period, or, if the Committee elects to compute the benefit after
      the
      end of the Performance Period, the Performance Percentage, as determined by
      the
      Committee, attained during the Performance Period for the Performance
      Share.

     

    (c)     On
      Account of Disability.
      Except
      as otherwise provided by the Committee in the Award Agreement, if a Grantee’s
      employment or service terminates on account of Disability, then:

     

    (i)     the
      Grantee’s Restricted Shares that were forfeitable shall thereupon become
      nonforfeitable;

     

    (ii)    any
      unexercised option or SAR, to the extent exercisable on the date of such
      termination of employment, may be exercised in whole or in part, within the
      first twelve (12) months after such termination of employment or service (but
      only during the Option Term) by the Grantee, or by (A) his or her personal
      representative or by the person to whom the option or SAR, as applicable, is
      transferred by will or the applicable laws of descent and distribution, (B)
      the
      Grantee’s designated beneficiary or (C) a Permitted Transferee; and, to the
      extent that any such option of SAR was not exercisable on the date of such
      termination of employment, it will immediately terminate; and

     

    (iii)   any
      unexercised Performance Shares may be exercised in whole or in part, at any
      time
      within six (6) months after such termination of employment or service on account
      of Disability by the Grantee, or by (A) his personal representative or by the
      person to whom the Performance Shares are transferred by will or the applicable
      laws of descent and distribution, (B) the Grantee’s designated beneficiary or
      (C) a Permitted Transferee, except that the benefit payable with respect to
      any
      Performance Shares for which the Performance Period has not ended as of the
      date
      of such termination of employment on account of Disability shall be equal to
      the
      product of the Fair Market Value of the Performance Shares as of the date of
      exercise multiplied successively by each of the following:

     

    (A)     a
      fraction, the numerator of which is the number of months (including as a whole
      month any partial month) that have elapsed since the beginning of such
      Performance Period until the date of such termination of employment or service
      and the denominator of

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    which
      is
      the number of months (including as a whole month any partial month) in the
      Performance Period; and

     

    (B)     a
      percentage determined in the discretion of the Committee that would be earned
      under the terms of the applicable Award Agreement assuming that the rate at
      which the performance goals have been achieved as of the date of such
      termination of employment would continue until the end of the Performance
      Period, or, if the Committee elects to compute the benefit after the end of
      the
      Performance Period, the Performance Percentage, as determined by the Committee,
      attained during the Performance Period for the Performance Share.

     

    (d)     Upon
      a
      Change of Control.
      The
      degree, if any, to which any Awards shall vest upon a Change of Control or
      a
      termination of employment or service in connection with a Change of Control
      shall be specified by the Committee in the applicable Award
      Agreement.

     

    (e)     Any
      Other Reason.
      Except
      as otherwise provided by the Committee in the Award Agreement, if a Grantee’s
      employment or service terminates for any reason other than for Cause, death,
      Disability or pursuant to a Change of Control, then:

     

    (i)     the
      Grantee’s Restricted Shares (and any SARs identified therewith), to the extent
      forfeitable on the date of the Grantee’s termination of employment or service,
      shall be forfeited on such date;

     

    (ii)    any
      unexercised option or SAR (other than a SAR identified with a Restricted Share
      or Performance Share), to the extent exercisable immediately before the
      Grantee’s termination of employment or service, may be exercised in whole or in
      part, not later than three (3) months after such termination of employment
      or
      service (but only during the Option Term); and, to the extent that any such
      option of SAR was not exercisable on the date of such termination of employment
      or service, it will immediately terminate; and

     

    (iii)    the
      Grantee’s Performance Shares (and any SARs identified therewith) shall become
      nonforfeitable and may be exercised in whole or in part, but only if and to
      the
      extent determined by the Committee.

     

    (f)     Repurchase
      Rights.
      If a
      Grantee’s employment or service with the Company is terminated for Cause or if
      Grantee breaches any post-termination covenants set forth in any written
      agreement between Grantee and the Company, the Company may, in its discretion,
      for a period of one year after the termination for Cause, or the actual
      discovery by the Company of the breach, as applicable, and upon 10 days notice
      to the Grantee, repurchase all or any portion of any Common Stock acquired
      by
      the Grantee upon the Grantee’s exercise of an Award. The purchase price for any
      Common Stock repurchased by the Company pursuant to this Section 14(f) shall
      be
      the lesser of the price paid to acquire such Common Stock and the Fair Market
      Value thereof on the date of such purchase by the Company.

     

    15.   Plans
      of Foreign Subsidiaries.
      The
      Committee may authorize any foreign Subsidiary to adopt a plan for granting
      Awards (“Foreign
      Plan”).
      All
      Awards granted under such Foreign Plan shall be treated as grants under the
      Plan. Such Foreign Plans shall have such provisions as the Committee permits
      not
      inconsistent with the provisions of the Plan. Awards granted under a Foreign
      Plan shall be governed by the terms of the Plan, except to the extent that
      the
      provisions of the Foreign Plan are more restrictive than the provisions of
      the
      Plan, in which case the Foreign Plan shall control.

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

     

    16.   Substituted
      Awards.
      If the
      Committee cancels any Award (whether granted under this Plan or any plan of
      any
      entity acquired by the Company or a Subsidiary), the Committee may, in its
      discretion, substitute a new Award therefor upon such terms and conditions
      consistent with the Plan as the Committee may determine, except that (a) the
      Option Price of any new option, and the Strike Price of any new SAR, shall
      not
      be less than one hundred percent (100%) (one hundred ten percent (110%) in
      the
      case of an incentive stock option granted to a Ten Percent Owner) of the Fair
      Market Value of a Share on the date of the grant of the new Award; and (b)
      the
      Grant Date of the new Award shall be the date on which such new Award is
      granted.

     

    17.   Securities
      Law Matters.

     

    (a)     Compliance.
      If the
      Committee deems it necessary to comply with any applicable securities law,
      the
      Committee may require a written investment intent representation by the Grantee
      and may require that a restrictive legend be affixed to certificates for Shares.
      If, based upon the advice of counsel to the Company, the Committee determines
      that the exercise or nonforfeitability of, or delivery of benefits pursuant
      to,
      any Award would violate any applicable provision of (i) federal or state
      securities or blue-sky laws or regulations or (ii) the listing requirements
      of
      any national exchange or national market system on which are listed any of
      the
      Company’s equity securities, then the Committee may postpone any such exercise,
      nonforfeitability or delivery, as applicable, but the Company shall use all
      reasonable efforts to cause such exercise, nonforfeitability or delivery to
      comply with all such provisions at the earliest practicable date.

     

    (b)     Section
      16.
      Grants
      of options to Section 16 Grantees shall comply with Rule 16b-3 and shall contain
      such additional conditions or restrictions as may be required thereunder for
      such grants to qualify for exemption from liability under Section 16(b) of
      the
      1934 Act.

     

    18.   No
      Employment Rights.
      Neither
      the establishment of the Plan nor the grant of any Award shall (a) give any
      Grantee the right to remain employed or otherwise engaged, hired or retained
      by
      the Company or any Subsidiary, or entitle any Grantee to any benefits not
      specifically provided by the Plan or (b) modify the right of the Company or
      any
      Subsidiary to modify, amend, or terminate any employee benefit
      plan.

     

    19.   No
      Rights as a Shareholder.
      A
      Grantee shall not have any rights as a shareholder of the Company with respect
      to the Shares (other than Restricted Shares) which may be deliverable upon
      exercise or payment of such Award until such shares have been delivered to
      him
      or her. Restricted Shares, whether held by a Grantee or in escrow by the
      Company, shall confer on the Grantee all rights of a shareholder of the Company,
      except as otherwise provided in the Plan or in the applicable Award Agreement.
      At the time of a grant of Restricted Shares, the Committee may require the
      payment of cash dividends thereon to be deferred and, if the Committee so
      determines, reinvested in additional Restricted Shares. Stock dividends or
      deferred cash dividends issued with respect to Restricted Shares shall be
      subject to the same restrictions and other terms as apply to the Restricted
      Shares with respect to which such dividends are issued. The Committee may in
      its
      discretion provide for payment of interest on deferred cash
      dividends.

     

    20.   Nature
      of Payments.
      Awards
      shall be special incentive payments to the Grantee and shall not be taken into
      account in computing the amount of salary or compensation of the Grantee for
      purposes of determining any pension, retirement, death, or other benefit under
      (a) any pension, retirement, profit-sharing, bonus, insurance, or other employee
      benefit plan of the Company or any Subsidiary or (b) any agreement between
      (i)
      the Company or any Subsidiary and (ii) the Grantee, except as such plan or
      agreement shall otherwise expressly provide.

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    21.   Non-Uniform
      Determinations.
      The
      Committee’s determinations under the Plan need not be uniform and may be made by
      the Committee selectively among persons who receive, or are eligible to receive,
      Awards, whether or not such persons are similarly situated. Without limiting
      the
      generality of the foregoing, the Committee shall be entitled, to enter into
      non-uniform and selective Award Agreements as to (a) the identity of the
      Grantees, (b) the terms and provisions of Awards and (c) the treatment of
      terminations of employment or service.

     

    22.   Adjustments.
      The
      Committee shall make equitable adjustment of:

     

    (a)     the
      aggregate number of Shares available under the Plan for Awards and the aggregate
      number of Shares for which Awards may be granted to any individual Grantee
      in
      any calendar year pursuant to the second sentence of Section 2;

     

    (b)     the
      number of Shares, SARs or Performance Shares covered by an Award;
      and

     

    (c)     the
      Option Price of all outstanding options and the Strike Price of all outstanding
      SARs;

     

    to
      reflect a stock dividend, stock split, reverse stock split, share combination,
      recapitalization, merger, consolidation, spin-off, split-off, reorganization,
      rights offering, liquidation or similar event, of or by the
      Company.

     

    23.   Amendment
      of the Plan.
      The
      Committee may from time to time, in its discretion, amend the Plan without
      the
      approval of the Company’s shareholders, except (a) as such shareholder approval
      may be required under the listing requirements of any securities exchange or
      national market system on which are listed the Company’s equity securities and
      (b) that the Committee may not without the approval of the Company’s
      shareholders amend the Plan to increase the total number of shares reserved
      for
      the purposes of the Plan.

     

    24.   Termination
      of the Plan.
      The
      Plan shall continue in effect until the earlier of its termination by the
      Committee or the date on which all of the shares of Common Stock available
      for
      issuance under the Plan have been issued and all restrictions on such Shares
      under the terms of the Plan and the agreements evidencing Awards granted under
      the Plan have lapsed. However, all Awards shall be granted, if at all, within
      ten (10) years from the earlier of the date the Plan is adopted by the Board
      or
      the date the Plan is duly approved by the shareholders of the Company.
      Notwithstanding the foregoing, if the maximum number of shares of Common Stock
      issuable pursuant to the Plan has been increased at any time, all Awards shall
      be granted, if at all, no later than the last day preceding the ten (10) year
      anniversary of the earlier of (a) the date on which the latest such increase
      in
      the maximum number of shares of Common Stock issuable under the Plan was
      approved by the shareholders of the Company or (b) the date such amendment
      was
      adopted by the Board. No termination shall affect any Award then outstanding
      under the Plan.

     

    25.   No
      Illegal Transactions.
      The
      Plan and all Awards granted pursuant to it are subject to all applicable laws
      and regulations. Notwithstanding any provision of the Plan or any Award,
      Grantees shall not be entitled to exercise, or receive benefits under, any
      Award, and the Company shall not be obligated to deliver any Shares or deliver
      benefits to a Grantee, if such exercise or delivery would constitute a violation
      by the Grantee or the Company of any applicable law or regulation.

     

    26.   Constructive
      Sales.
      The
      Grantee shall not directly or indirectly, through related parties or otherwise,
      sell “short” or “short against the box” (as those terms are generally understood
      in the

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    securities
      markets), or otherwise directly or indirectly (through derivative instruments
      or
      otherwise) dispose of or hedge, any securities of the Company issuable upon
      exercise of such Grantee’s Award(s). The foregoing provision may, at the
      discretion of the Committee, be reflected in the individual Award Agreements
      governing the terms and conditions of the Awards granted by the Company to
      the
      Grantees (which shall be entered into following the grant of such Awards by
      the
      Committee).

     

    27.   Definitions.
      The
      terms set forth below have the indicated meanings which are applicable to both
      the singular and plural forms thereof:

     

    (a)     “Award”
shall
      mean options, including ISOs, Restricted Shares, Bonus Shares, SARs or
      Performance Shares granted under the Plan.

     

    (b)     “Award
      Agreement”
shall
      mean the written agreement by which an Award shall be evidenced.

     

    (c)     “Board”
shall
      mean the Board of Directors of the Company.

     

    (d)     “Bonus
      Shares”
shall
      mean Shares that are awarded to a Grantee without cost and without
      restrictions.

     

    (e)     “Cause”,
      with
      respect to any employee or consultant of the Company shall have the meaning
      set
      forth in such person’s employment, consulting or other applicable agreement, or,
      in the absence of any such agreement or if such term is not defined in any
      such
      agreement, shall mean any one or more of the following, as determined by the
      Committee (in the case of a Section 16 Grantee) or the Chief Executive Officer
      or President of the Company (in the case of any other Grantee):

     

    (i)     a
      Grantee’s commission of a crime that is likely to result in injury to the
      Company or a Subsidiary;

     

    (ii)    the
      material violation by the Grantee of written policies of the Company or a
      Subsidiary;

     

    (iii)   the
      habitual neglect by the Grantee in the performance of his or her duties to
      the
      Company or a Subsidiary; or

     

    (iv)   a
      Grantee’s willful misconduct or inaction in connection with his or her duties to
      the Company or a Subsidiary.

     

    (f)     “Change
      of Control”
shall
      mean the occurrence of any of the following events:

     

    (i)     Any
      “person”, as such term is currently used in Section 13(d) or 14(d) of the 1934
      Act, other than any employee benefit plan of the Company, becomes a “beneficial
      owner” (as such term is currently used in Rule 13d-3 promulgated under the 1934
      Act) of 50% or more of the number of shares of the Company’s voting
      stock;

     

    (ii)    The
      Board
      adopts any plan of liquidation providing for the distribution of all or
      substantially all of the Company’s assets;

     

    (iii)   All
      or
      substantially all of the assets or business of the Company is disposed of
      pursuant to a sale, merger, consolidation or other transaction, unless the
      shareholders of the

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    Company
      immediately prior to such transaction beneficially own (within the meaning
      of
      Rule 13d-3 promulgated under the 1934 Act) as a result of their ownership of
      stock in the Company, at least 50% of the number of shares of voting stock
      or
      other voting equity of the entity or entities that succeed to the business
      of
      the Company; or

     

    (iv)   The
      Company combines with another company and is the surviving corporation but,
      immediately after the combination, the shareholders of the Company immediately
      before such transaction beneficially own (within the meaning of Rule 13d-3
      promulgated under the 1934 Act) as a result of their ownership of stock in
      the
      Company, less than 50% of the number of shares of voting stock of the combined
      company.

     

    (g)    “Code”
shall
      mean the Internal Revenue Code of 1986, as amended or superseded, and the
      regulations and rulings thereunder. Reference to a particular section of the
      Code shall include references to successor provisions.

     

    (h)    “Committee”
shall
      mean the committee of the Board appointed pursuant to Section 3(a), or if not
      so
      appointed, shall mean the entire Board.

     

    (i)  
  “Common
      Stock”
shall
      mean the common stock, $.001 par value per share, of the Company.

     

    (j)  
  “Consultant”
shall
      mean any person, including a Director, who is engaged by the Company or any
      parent, Subsidiary or affiliate thereof, to render services to or for the
      benefit of the Company and is compensated for such services.

     

    (k)    “Director”
shall
      mean a member of the Board.

     

    (l)    
 “Disability”
shall
      mean a permanent and total disability, within the meaning of Section 22(e)(3)
      of
      the Code.

     

    (m)    “Effective
      Date”
shall
      mean the date set forth in the first paragraph hereof, provided that the
      Company’s stockholder within one (1) year of the Effective Date approve the
      adoption of the Plan.

     

    (n)    “Eligible
      Person”
shall
      mean any Employee, Consultant or Director of the Company or any Subsidiary,
      including any prospective Employee or Employee on an approved leave of absence
      or layoff, if such leave or layoff does not qualify as a
      Disability.

     

    (o)    “Employee”
shall
      mean any person treated as an employee (including officers and directors) in
      the
      records of the Company and who is subject to the control and direction of the
      Company with regard to both the work to be performed and the manner and method
      of performance. The payment of a director’s fee by the Company to a Director
      shall not be sufficient to constitute “employment” of the Director by the
      Company.

     

    (p)    “Fair
      Market Value”
per
      share of Common Stock on any relevant date shall mean such value as determined
      in accordance with the following provisions:

     

    (i)     If
      the
      Common Stock is at that time listed on a national securities exchange, then
      the
      Fair Market Value shall mean the closing selling price per share of Common
      Stock
      on the exchange on which such Common Stock is principally traded on the relevant
      date or, if there were no

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    sales
      on
      that date, the closing selling price of such Common Stock on the last preceding
      date on which there were sales.

     

    (ii)    If
      the
      Common Stock is at that time traded on the Nasdaq National Market®, Nasdaq Small
      Cap MarketSM or OTC Bulletin Board®, as the case may be, then the Fair Market
      Value shall mean the closing selling price per share of Common Stock on the
      relevant date, as the price is reported by the National Association of
      Securities Dealers, Inc., on the Nasdaq National Market®, Nasdaq Small Cap
      MarketSM or OTC Bulletin Board®, as the case may be, or any successor system. If
      there is no closing selling price for the Common Stock on the relevant date,
      then the Fair Market Value shall mean the closing selling price on the last
      preceding date for which such quotation exists.

     

    (iii)   If
      the
      Common Stock is neither listed on any national securities exchange nor traded
      on
      the Nasdaq National Market®, Nasdaq Small Cap MarketSM or OTC Bulletin Board®,
      then the Fair Market Value shall mean the value per share of Common Stock as
      determined by the Board after taking into account such factors as the Board
      shall in good faith deem appropriate.

     

    (q)    
“Grant
      Date”
shall
      have the meaning specified in Section 6(a)(i).

     

    (r)     “Grantee”
shall
      mean an individual who has been granted an Award or any Permitted
      Transferee.

     

    (s)     “Hostile
      Tender-Offer”
shall
      mean the acquisition, directly or indirectly, by any person or related group
      of
      persons (other than the Company or a person that directly or indirectly
      controls, is controlled by, or is under common control with, the Company) of
      beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
      securities possessing more than fifty percent (50%) of the total combined voting
      power of the Company’s outstanding securities pursuant to a tender or exchange
      offer made directly to the Company’s stockholders which the Board does not
      recommend such stockholders to accept.

     

    (t)     “Immediate
      Family”
shall
      mean, with respect to a particular Grantee, the Grantee’s spouse, children and
      grandchildren.

     

    (u)     “ISO”
shall
      mean an incentive stock option within the meaning of Section 422 of the
      Code.

     

    (v)     “Mature
      Shares”
shall
      mean Shares for which the holder thereof has good title, free and clear of
      all
      liens, encumbrances and restrictions, and which such holder has held for at
      least six (6) months.

     

    (w)     “Minimum
      Consideration”
shall
      mean $.001 per Share or such other amount that is from time to time considered
      to be capital for purposes of the General Corporation Law of the State of
      Delaware.

     

    (x)     “1934
      Act”
shall
      mean the Securities Exchange Act of 1934, as amended. References to a particular
      section of the 1934 Act or rule thereunder, include references to successor
      provisions.

     

    (y)     “Option
      Price”
shall
      mean the per share exercise price of an option.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    (z)     “Option
      Term”
shall
      mean the period beginning on the Grant Date of an option and ending on the
      expiration date of such option, as specified in the Award Agreement for such
      option and as may, in the discretion of the Committee and consistent with the
      provisions of the Plan, be extended from time to time.

     

    (aa)    “Performance
      Shares”
shall
      mean an Award to a Grantee pursuant to Section 6(e).

     

    (bb)   “Permitted
      Transferee”
shall
      mean a person to whom an Award may be transferred or assigned in accordance
      with
      Section 7.

     

    (cc)   “Restricted
      Shares”
shall
      mean Shares that are subject to forfeiture if the Grantee does not satisfy
      the
      conditions specified in the Award Agreement applicable to those
      Shares.

     

    (dd)   “Rule
      16b-3”
shall
      mean Rule 16b-3 as promulgated under the 1934 Act, as amended from time to
      time,
      together with any successor rule.

     

    (ee)   “SAR”
shall
      mean a stock appreciation right.

     

    (ff)    “Section
      16 Grantee”
shall
      mean a person who is subject to potential liability under Section 16(b) of
      the
      1934 Act with respect to transactions involving equity securities of the
      Company.

     

    (gg)   “Share”
shall
      mean a share of Common Stock.

     

    (hh)   “Strike
      Price”
shall
      have the meaning specified in Section 6(d)(ii).

     

    (ii)     “Subsidiary”
shall
      mean a subsidiary corporation as defined in Section 424(f) of the Code (with
      the
      Company being treated as the employer corporation for purposes of this
      definition).

     

    (jj)     “Tender-Offer
      Price”
shall
      mean the greater
      of (i)
      the Fair Market Value per share of Common Stock on the date the option is
      surrendered to the Company in connection with a Hostile Tender-Offer or (ii)
      the
      highest reported price per share of Common Stock paid by the tender offeror
      in
      effecting such Hostile Tender-Offer. However, if the surrendered option is
      an
      ISO, the Tender-Offer Price shall not exceed the clause (i) price per
      share.

     

    (kk)    “Ten
      Percent Owner”
shall
      mean a person who owns capital stock (including stock treated as owned under
      Section 424(d) of the Code) possessing more than ten percent of the total
      combined Voting Power of all classes of capital stock of the Company or any
      Subsidiary.

     

    (ll)     “Voting
      Power”
shall
      mean the combined voting power of the then-outstanding securities of the Company
      entitled to vote generally in the election of directors.

     

    28.   Controlling
      Law.
      The law
      of the State of Delaware, except its law with respect to choice of law, shall
      control all matters relating to the Plan.

     

    29.   Severability.
      If any
      part of the Plan is declared by any court or governmental authority to be
      unlawful or invalid, such unlawfulness or invalidity shall not invalidate any
      other part of the Plan. Any Section or part of a Section so declared to be
      unlawful or invalid shall, if possible, be

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    construed
      in a manner which will given effect to the terms of such Section to the fullest
      extent possible while remaining lawful and valid.

     

    
      
        	
                Amendments:
                    

              	 
	
                By
                  Stockholders - 

              	
                 
                  July 20, 2006

              
	
                By
                  Board of Directors -

              	
                 
                  September 21, 2006

              
	
                By
                  Compensation Committee - 

              	
                 
                  March 8, 2006

              

      

    

     

    
      
         

      

      
        21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]