UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )

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CHASE PACKAGING CORPORATION
(Name of Registrant as Specified In Its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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CHASE PACKAGING CORPORATION

P.O. Box 6199

636 River Road

Fair Haven, New Jersey 07704

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held June ~~3, 2008~~2, 2009

To Shareholders of

CHASE PACKAGING CORPORATION:

The annual meeting of shareholders of Chase Packaging Corporation (the “Company”) will be held at the University Club, 1 West 54th Street, New York, New York, on June ~~3, 2008,~~2, 2009, at 2:00 p.m. (Eastern Daylight Saving Time) for the following purposes:

1. To elect four directors to serve until the next annual meeting of shareholders and until their respective successors have been elected and qualified;

2. ~~To consider and vote upon an increase in the authorized shares of the Company’s common stock, par value $0.10 per share, to 200 million;~~

3.~~To consider and vote upon the proposed 2008 Stock Awards Plan;~~

4.To ratify the selection of ~~Lazar Levine & Felix LLP~~Parente Randolph, LLC as the Company’s independent registered public accounting firm; and

5.3. To transact such other business as may properly come before the meeting and any adjournment thereof.

Information regarding matters to be acted upon at this meeting is contained in the accompanying proxy statement. Only shareholders of record at the close of business on April ~~7, 2008,~~6, 2009, are entitled to notice of and to vote at the meeting and any adjournment thereof. All shareholders are cordially invited to attend the meeting.

This proxy statement, the accompanying proxy card, and the Company’s ~~2007~~2008 annual report to shareholders are first being made available on the internet at www.voteproxy.com on or about April 17, 2009, through the notice and access process to the Company’s ~~shareholders on or about April 21, 2008.~~shareholders.

IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING, REGARDLESS OF THE NUMBER OF SHARES YOU HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE EITHER SUBMIT YOUR PROXY USING THE INTERNET OR TELEPHONE PROCEDURES PROVIDED ON THE NOTICE AND ACCESS CARD OR, IF YOU HAVE ELECTED TO RECEIVE A COPY OF YOUR PROXY CARD IN THE MAIL, COMPLETE AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE. PLEASE NOTE THAT SUBMITTING A PROXY USING ANY ONE OF THESE METHODS WILL NOT PREVENT YOU FROM ATTENDING THE MEETING AND VOTING IN PERSON.

		By Order of the Board of Directors


Fair Haven, New Jersey		Ann C. W. Green
April ~~, 2008~~17, 2009		Assistant Secretary

CHASE PACKAGING CORPORATION

P.O. Box 6199

636 River Road

Fair Haven, New Jersey 07704

PROXY STATEMENT FOR

ANNUAL MEETING OF SHAREHOLDERS

To Be Held June ~~3, 2008~~2, 2009

FREQUENTLY ASKED QUESTIONS AND ANSWERS

Why am I receiving these materials?

The Company is soliciting your proxy to vote at the ~~2008~~2009 annual meeting of shareholders. The information provided in this proxy statement is for your use in determining how you will vote on the proposals described within.

What proposals are scheduled to be voted on at the meeting?

The proposals scheduled for a vote are:

1. To elect four directors to serve until the next annual meeting of shareholders and until their respective successors have been elected and qualified; and

2. ~~To consider and vote upon an increase in the authorized shares of the Company’s common stock, par value $.10 per share (the “Common Stock”), to 200 million;~~

3.~~To consider and vote upon the proposed 2008 Stock Awards Plan; and~~

4.To ratify the selection of ~~Lazar Levine & Felix~~Parente Randolph, LLP as the Company’s independent registered public accounting firm.

What is the recommendation of the Board of Directors on each of the proposals scheduled to be voted on at the meeting?

The Company’s Board of Directors recommends that you vote ~~for~~FOR all of the proposals.

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials this year instead of a full set of proxy materials?

As permitted by the rules ~~recently~~ adopted by the Securities and Exchange Commission, the Company is making this proxy statement and related proxy materials available on the internet under the notice and access delivery model. The notice and access model ~~removes~~eliminates the requirement for public companies to automatically send shareholders a printed set of proxy materials and allows companies instead to deliver to their shareholders a “Notice of Internet Availability of Proxy Materials” and to provide access to the documents over the internet. The Company’s Notice of Internet Availability of Proxy Materials was first mailed to shareholders of record and beneficial owners on or about April ~~21, 2008.~~17, 2009.

The Company’s annual report to shareholders, including financial statements, for the fiscal year ended December 31, ~~2007,~~2008, is being made available at the same time and by the same methods. The annual report to shareholders is not to be considered as a part of the proxy solicitation material or as having been incorporated by reference.

In addition, any shareholder may request to receive proxy materials in printed form by mail or electronically by e-mail on an ongoing basis. Receiving future proxy materials by e-mail will save the cost of printing and mailing documents to shareholders and will reduce the impact of annual meetings on the environment. A shareholder’s election to receive proxy materials by e-mail will remain in effect unless the shareholder terminates it.

Who will bear the expense of soliciting votes at the annual meeting?

The expense of proxy solicitation will be borne by the Company. Although solicitation is to be made primarily through the electronic mail, the Company’s officers and employees and those of its transfer agent may solicit proxies by telephone or personal contact, but in such event no additional compensation will be paid by the Company for such solicitation. The Company will bear the cost of preparing, assembling, and ~~mailing~~delivering the proxy materials. Upon request, the Company will reimburse brokers, banks, and nominees and other fiduciaries for the postage and reasonable clerical expenses of forwarding the proxy materials to their principals, who are the beneficial owners of the Common Stock.

What constitutes a quorum for the meeting?

The presence, in person or by proxy, of the holders of (i) one-third (1/3) of the shares of Common Stock outstanding on April ~~7, 2008~~6, 2009 (the “Record Date”),; and (ii) one-third (1/3) of the shares of Series A 10% Convertible Preferred Stock (the “Series A Preferred Stock”) outstanding on the Record Date, constitutes a quorum for the conduct of business.

How do I attend the annual meeting of shareholders?

All shareholders are invited to attend the annual meeting of shareholders to be held on June ~~3, 2008,~~2, 2009, at University Club, 1 West 54th Street, New York, New York, at 2:00 p.m. (Eastern Daylight Saving Time).

Who can vote at the meeting and what is the vote required for each of the proposals?

All shareholders may vote by proxy or in person at the annual meeting, subject to the conditions described below for street-name holders. Proposal No. 1 requires a plurality of the votes cast at the annual meeting by the holders of shares of stock entitled to vote on such matters. This means that the shareholders will elect the four persons receiving the highest number of “for” votes at the annual meeting. Proposal No. 2 requires the affirmative vote of ~~the holders of two-thirds (2/3) of the outstanding shares of stock entitled to vote on such matter. Proposals No. 3 and No. 4 require the affirmative vote of~~ a majority of the votes cast by the holders of stock represented at the annual meeting in person or by proxy.

What is the difference between being a shareholder of record and a beneficial owner?

If your shares are registered directly in your name with our stock transfer agent, you are considered the “shareholder of record” of those shares. Proxy materials will be made available to all shareholders of record.

If your shares are held in a stock brokerage account or by a bank or other nominee on your behalf, your broker, bank, or other nominee is considered the shareholder of record, and you are considered the “beneficial owner” or “street name holder” of those shares. In this case, the shareholder of record has forwarded to you information regarding access to these proxy materials along with separate voting instructions. As the beneficial owner, you have the right to direct the shareholder of record how to vote your shares by following the voting instructions they have provided with these materials. Because you are not the shareholder of record, you may not vote your shares in person at the meeting unless you receive a valid proxy from your broker, bank, or other nominee that holds your shares thereby giving you the right to vote the shares in person at the meeting.

How many shares can vote at the ~~2008~~2009 meeting?

As of the Record Date, there were 15,536,275 shares of Common Stock and ~~13,818~~15,536 shares of Series A ~~10% Convertible~~ Preferred Stock, par value $1.00 per share, ~~(the “Series A Preferred Stock”),~~ issued and outstanding and entitled to vote at the meeting. Holders of Common Stock are entitled to one vote per share, and holders of Series A Convertible Preferred Stock are entitled to 1,000 votes per share, ~~for~~with regard to each matter presented at the annual meeting.

Who will count the votes and certify the results?

An independent vote tabulator will count the votes. American Stock Transfer and Trust Company has been appointed by the Board of Directors as the independent Inspector of Election and will determine the existence of a quorum, validity of proxies and ballots, and certify the results of the voting.

If I vote and then want to change my vote, may I?

You may revoke your proxy at any time before the meeting by submitting a later dated proxy card, by notifying our Assistant Secretary in writing that you have revoked your proxy, or by attending the meeting and giving notice of revocation in person. Written revocations should be directed to:

Assistant Secretary

Chase Packaging Corporation

636 River Road

Fair Haven, NJ 07704

Are shareholders permitted to ask questions at the meeting?

During the annual meeting, shareholders may ask questions or make comments relating to proposals following the second of the motion that such proposal be approved and prior to the taking of the vote by the chairman.

Following the annual meeting, the Chairman of the Board will present a review of the Company’s financial statements, and there will be an opportunity for shareholders to ask other questions about the Company’s business.

PROPOSAL NO. 1

ELECTION OF DIRECTORS

At the ~~2008~~2009 annual meeting of shareholders, the Board of Directors has named four nominees for election as directors to hold office until the ~~2009~~2010 annual meeting of shareholders and until their successors have been elected and qualified. The four nominees are current directors of the Company and are listed below with brief biographies.

William J. Barrett, ~~68,~~69, Secretary of the Company since 2001, was a director of the Company from 1996 to 1997 and rejoined the Board of Directors in 2001. Mr. Barrett is President of Barrett-Gardner Associates, Inc., a private merchant banking firm; Director of MassMutual Corporate Investors and MassMutual Participation Investors, closed-end investment trusts; Director, Executive Vice President, Assistant Treasurer and Secretary of Supreme Industries, Inc., a specialized manufacturer of truck bodies and shuttle buses; Director of TGC Industries, Inc., a geophysical services company; and Chairman of the Board of Rumson-Fair Haven Bank and Trust Company, a New Jersey state independent, commercial bank and trust company.

Herbert M. Gardner, ~~68,~~69, Vice President of the Company since 2001, was a director of Chase Packaging from 1996 to 1997 and rejoined the Board of Directors in 2001. Mr. Gardner is Executive Vice President of Barrett-Gardner Associates, Inc., a private merchant banking firm; Director of ~~Co-Active Marketing Group,~~MKTG, Inc., a marketing and sales promotion company; Director of Nu Horizons Electronics Corp., an electronic component distributor; Chairman of the Board of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses; Director of TGC Industries, Inc., a geophysical services company; and Director of Rumson-Fair Haven Bank and Trust Company, a New Jersey state independent, commercial bank and trust company.

Edward L. Flynn, ~~73,~~74, joined the Board of Directors in 2007. He is the owner of Flynn Meyer Company, a restaurant management company; Treasurer and Director of Citri-Lite Co., a soft drink company; Director of Bioject Medical System, a medical device company; Director of Supreme Industries, Inc., a manufacturer of specialized truck bodies and shuttle buses; and Director of TGC Industries, Inc., a geophysical services company.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the names of those persons known to management to be beneficial owners of more than five percent of the Company’s Common Stock as of the Record Date. The table also sets forth information with respect to the Common Stock which is beneficially owned by each director and executive officer of the Company, and by all directors and executive officers of the Company as a group, as of the Record Date (including shares beneficially owned by such persons, pursuant to the rules of beneficial ownership, as a result of the ownership of certain warrants and other securities convertible into Common Stock) according to data furnished by the persons named. Persons having direct beneficial ownership of Common Stock possess the sole voting and dispositive power in regard to such stock.

Name and address	Title of Class	Amount and Nature of Beneficial Ownership	Approximate Percentage of Class (1)	Title of Class	Amount and Nature of Beneficial Ownership		Approximate Percentage of Class (1)
Allen T. McInnes 4532 7^th Street Lubbock, TX 79416	Common	4,384,954(6)	24.6%	Common	4,577,954	(5)	25.4	%

Herbert M. Gardner 636 River Road Fair Haven, NJ 07704	Common	3,841,809 (2) (6)	21.7%	Common	4,016,673	(2)(5)	22.5	%

William J. Barrett 19 Point Milou St. Barthelemy, FWI	Common	5,470,405 (3) (6)	29.3%	Common	4,907,905	(3)(5)	25.8	%

Edward L. Flynn 75-11 Myrtle Avenue Glendale, NY 11385	Common	1,402,359 (4) (6)	8.5%	Common	1,484,359	(4)(5)	8.9	%

Ann C. W. Green 636 River Road Fair Haven, NJ 07704	Common	662,775(6)	4.2%	Common	690,775	(5)	4.3	%

Special Situations Funds 153 E. 53rd Street, 51st Fl. New York, NY 10022	Common	789,165 (5)	5.08%

All directors & officers as a group (5 persons)	Common	15,762,302 (2)(3)(4)(6)	64.1%	Common	15,677,666	(2)(3)(4)(5)	61.9	%

(1) The percentage calculations have been made in accordance with Rule 13d-3(d)(1) promulgated under the Securities Exchange Act of 1934, as ~~amended.~~amended, based on number of shares outstanding plus the Common Stock underlying the warrants and Series A Convertible Preferred Stock.

(2) Includes 167,590 shares of Common Stock owned by Herbert M. Gardner’s wife. Mr. Gardner has disclaimed beneficial ownership of these shares.

(3) Includes 286,345 shares of Common Stock owned by William J. Barrett’s wife. Mr. Barrett has disclaimed beneficial ownership of these shares.

~~(6)~~(5) Includes the Common Stock underlying Warrants and Series A Preferred Stock held by the following directors and executive officers:.

Beneficial Owner	Number of Common Shares Underlying Series A Preferred Beneficially Owned	Number of Common Shares Underlying warrants Beneficially Owned	Number of Common Shares Underlying Series A Preferred Beneficially Owned	Number of Common Shares Underlying Warrants Beneficially Owned

Allen T. McInnes	1,533,000	766,500	1,726,000	766,500
Herbert M. Gardner(1)	1,425,000	712,500	1,602,000	712,500
William J. Barrett(2)	2,158,000	1,079,000	2,429,000	1,079,000
Edward L. Flynn(3)	668,000	334,000	750,000	334,000
Ann C. W. Green	237,000	118,500	265,000	118,500

(1) ~~The numbers shown include 178,000~~Includes 199,000 and 89,000 shares of Common Stock underlying Series A Preferred Stock and Warrants, respectively, held by the named person’s ~~spouse, to which~~spouse. Mr. Gardner has disclaimed beneficial ownership of the ~~named person disclaims beneficial ownership.~~shares.

(2) ~~The numbers shown include 334,000~~Includes 375,000 and 167,000 shares of Common Stock underlying Series A Preferred Stock and Warrants, respectively, held by the named person’s ~~spouse, to which~~spouse. Mr. Barrett has disclaimed beneficial ownership of the ~~named person disclaims beneficial ownership.~~shares.

(3) ~~The numbers shown include 334,000~~Includes 375,000 shares and 167,000 shares of Common Stock underlying Series A Preferred Stock and Warrants, respectively, held by the named person’s ~~spouse, to which~~spouse. Mr. Flynn has disclaimed beneficial ownership of the ~~named person disclaims beneficial ownership.~~shares.

Section 16(a) Beneficial Ownership Reporting Compliance

To the best of the Company’s knowledge, all directors, executive officers, and beneficial owners of more than 10% of the Common Stock complied with Section 16(a) of the Securities Exchange Act of 1934, as amended, during ~~2007.~~2008.

EXECUTIVE OFFICERS

The following table sets forth certain information concerning the persons who serve as executive officers of the Company and who will continue to serve in such positions at the discretion of the Board of Directors.

Allen T. McInnes	7071	Chairman, President, and Treasurer

Herbert M. Gardner	6869	Vice President

William J. Barrett	6869	Secretary

Ann C. W. Green	6667	Chief Financial Officer and Assistant Secretary

Additional information regarding Messrs. McInnes, Gardner, and Barrett is included in the “Proposal No. 1, Election of Directors” section of this proxy statement. Ms. Green has served as Chief Financial Officer and Assistant Secretary of the Company since 2001. She is Vice President of Barrett-Gardner Associates, Inc., a private merchant banking firm. Ms. Green also serves as Assistant Secretary of each of Supreme Corporation, a specialized manufacturer of truck bodies and shuttle buses, and TGC Industries, Inc., a geophysical services company. She previously served for 15 years as Assistant Vice President of Janney Montgomery Scott, LLC, an investment banking firm.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

The Company’s Board of Directors met three times during ~~2007,~~2008, and all directors attended ~~at least 75%~~all of such meetings. The Board of Directors has not designated any committees. Since the Company is a development stage company, the Board of Directors believes that it adequately performs all necessary functions regarding governance of the Company.

EXECUTIVE COMPENSATION

Commencing November 1, 2007, the Company’s Board of Directors agreed to pay the Company’s Chief Financial Officer an annual salary of $17,000. No other officers ~~or Directors~~ of the Company receive compensation other than reimbursement of out-of-pocket expenses incurred in connection with Company business and development. There were no equity awards at fiscal year-end.

Summary Compensation Table

Name and Principal Position	Year	Salary		Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation	Total		Year	Salary		Bonus	Stock Awards	Option Awards	Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation	Total
Ann C. W. Green, Chief Financial Officer	2007	$	2,833	-0-	-0-	-0-	-0-	-0-	-0-	$	2,833
	2006	-0-		-0-	-0-	-0-	-0-	-0-	-0-	-0-

Ann C. W. Green,												2008	$	17,000	-0-	-0-	-0-	-0-	-0-	-0-	$	17,000
Chief Financial Officer												2007	$	2,833	-0-	-0-	-0-	-0-	-0-	-0-	$	2,833

In July of 2002, the Company received $8,000 as payment for 800,000 shares of Common Stock which were never actually issued. Through September 7, 2007, (the date of the closing of the private placement), thesuch $8,000 accrued $2,200 in compounded interest which management recorded due to the non issuance of shares forover a period of five year period. The(5) years. On October 16, 2007, the Board of Directors of the Company approved the issuance on October 16, 2007, of 68 private placement units in exchange for the $10,200$8,000 of cash received and $2,200 interest accrued interest.thereon.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Audit Fees

The ~~aggregated~~aggregate fees billed for each of the last two fiscal years for professional services rendered by the independent registered public accounting firm for the audit of the Company’s annual financial statements and review of financial statements included in the Company’s Forms ~~10-QSB~~10-Q were $17,500 and $14,500 for 2008 and ~~$12,500 for~~ 2007, ~~and 2006,~~ respectively.

Audit-Related Fees

None.

Tax Fees

The ~~aggregated~~aggregate fees billed for each of the last two fiscal years for professional services rendered by the independent registered public accounting firm for the preparation of the Company’ corporate tax returns were $2,500 and $2,000 for 2008 and ~~$1,500 for~~ 2007, ~~and 2006,~~ respectively.

All other Fees

The ~~aggregated~~aggregate fees billed for each of the last two fiscal years for professional services rendered by the independent registered public accounting firm for the preparation of the Company’s private placement unit filing were $8,216 and $2,093 for 2008 and ~~$0 for~~ 2007, ~~and 2006,~~ respectively.

The Board of Directors, which functions as the audit committee, makes reasonable inquiry as to the independence of the Company’s independent registered public accounting firm based upon the considerations set forth in Rule 2-01 of Regulation S-X, including the examination of representation letters furnished by the independent registered public accounting firm.

PROPOSAL NO. 2

~~AMENDMENT TO ARTICLES OF INCORPORATION~~

~~TO INCREASE AUTHORIZED SHARES~~

The Company’s Articles of Incorporation currently authorize the issuance of a total of 25,000,000 shares of Common Stock and 4,000,000 shares of preferred stock, par value $1.00 per share (the “Preferred Stock”). The Board of Directors has approved a proposal (the “Proposed Amendment”) to amend the Company’s Articles of Incorporation to increase the number of authorized shares of the Company’s Common Stock from 25,000,000 to 200,000,000. The Proposed Amendment does not contemplate an increase in the number of shares of Preferred Stock, and therefore, the total number of authorized shares of capital stock would increase to 204,000,000. If the Proposed Amendment is approved, it will become effective upon filing with the Secretary of State Articles of Amendment to the Company’s Articles of Incorporation. The full text of the proposed amendment to Section 4.1 of Article Four of the Company’s Articles of Incorporation is as follows:

“~~Common Stock~~. The aggregate number of shares of Common Stock which the Corporation may issue is 200,000,000 shares, each having a par value of ten cents ($.10). The shares shall be designated as Common Stock and shall have identical rights and privileges in every respect.”

On September 7, 2007, the Company completed a private placement of 13,334 units (the “Units”), each of which consists of: (i) one share of Series A 10% Convertible Preferred Stock, par value $1.00 per share (the “Series A Preferred Stock”); (ii) 500 shares of Common Stock; and (iii) 500 warrants (“Warrants”) exercisable for Common Stock on a one-for-one basis. The terms of the private placement include an obligation by the Company to register the Common Stock underlying the Units with the Securities and Exchange Commission.

As of the Record Date, 15,263,275 shares of Common Stock were issued and outstanding. The Company will be required to issue up to 20,727,000 shares of Common Stock if all of the shares of Series A Preferred Stock issued pursuant to the Units are converted into Common Stock and all of the Warrants issued pursuant to the Units are exercised for Common Stock.

The number of shares of Common Stock reserved by the Company for future issuance in connection with the private placement exceeds the number of shares authorized for issuance. In addition to the need to increase the authorized shares in connection with the private placement, the Company anticipates establishing a new business or engaging in a merger or other reorganization transaction for which additional shares of Common Stock may be needed. In addition, the Board of Directors has approved the 2008 Stock Awards Plan, subject to shareholder approval, as a means of attracting and retaining key employees. Issuances of stock options under the proposed plan will require the authorization of additional shares of Common Stock. See “Proposal No. 3, Approval of 2008 Stock Awards Plan” for a more detailed description regarding the Stock Awards Plan.

~~Except as described above, or elsewhere in this proxy statement, the Company has no plans, understandings, commitments, agreements, or undertakings concerning the issuance of any additional shares.~~

The Proposed Amendment will result in additional authorized but unissued shares of Common Stock which, if and when issued, will have the same rights and privileges as the shares of Common Stock currently authorized. The proposed increase in the number of authorized shares will not change the number of shares of Common Stock outstanding, nor will it have any immediate dilutive effect or change the rights of current holders of Common Stock. However, to the extent that additional authorized shares are issued in the future, they may decrease the percentage equity ownership of existing shareholders and,

depending on the price at which they are issued, may dilute earnings and book value on a per share basis. Our shareholders have no preemptive rights to subscribe for additional shares of Common Stock when issued which means that current shareholders do not have a prior right to purchase any newly-issued shares in order to maintain their proportionate ownership of the Common Stock.

The authorized but unissued shares of Common Stock could be used to make more difficult a change in control of the Company. For example, such shares could be sold to purchasers who might side with the Board of Directors in opposing a takeover bid that the Board determines not to be in the best interests of the Company and its shareholders. Such a sale could have the effect of discouraging an attempt by another person or entity, through the acquisition of a substantial number of shares of Common Stock, to acquire control of the Company since the issuance of new shares could be used to dilute the stock ownership of the acquirer. The Board of Directors is not aware of any pending or threatened efforts to obtain control of the Company and the Board has no current intention to use the additional shares of Common Stock to impede a takeover attempt or to propose any additional anti-takeover measures in future proxy solicitations.

~~The affirmative vote of the holders of two-thirds of the outstanding shares of capital stock entitled to vote at the meeting is required to approve the Proposed Amendment.~~

~~The Board of Directors recommends that shareholders vote FOR an increase in the number of authorized shares of Common Stock.~~

~~PROPOSAL NO. 3~~

~~APPROVAL OF 2008 STOCK AWARDS PLAN~~

The Board of Directors of the Company has adopted, subject to shareholder approval, the Chase Packaging Corporation 2008 Stock Awards Plan (hereinafter called the “2008 Plan”). The 2008 Plan is intended to enable the Company to remain competitive and innovative in its ability to attract, motivate, reward, and retain the services of key employees, key consultants, and outside directors. The 2008 Plan provides for the granting of stock options, Common Stock, and restricted stock. The 2008 Plan is expected to provide flexibility to the Company’s compensation methods in order to adapt the compensation of key employees, key consultants, and outside directors to a changing business environment (after giving due consideration to competitive conditions and the impact of federal tax laws). The following is a brief description of the 2008 Plan. A copy of the 2008 Plan is attached as Exhibit A to this proxy statement, and the following description is qualified in its entirety by reference to the 2008 Plan.

~~It is the judgment of the Board of Directors of the Company that the 2008 Plan is in the best interests of the Company and its shareholders.~~

~~Description of the 2008 Plan~~

~~Effective Date and Expiration~~

The 2008 Plan became effective on April 9, 2008, subject to and conditioned upon shareholder approval of the 2008 Plan, and will terminate on April 8, 2018. No award may be made under the 2008 Plan after its expiration date, but awards made prior thereto may extend beyond that date.

~~Share Authorization~~

Subject to certain adjustments, the number of shares of Common Stock that may be issued pursuant to awards under the 2008 Plan is 2,000,000 shares. Shares are counted only to the extent they are actually issued. If shares are issued and reacquired by the Company, such shares are available for issuance under the 2008 Plan. Shares tendered in payment of the purchase price of an award, to satisfy tax withholding obligations, or shares covered by an award that is settled in cash, are available for awards under the 2008 Plan.

A maximum of 80,000 shares may be granted in any one year in the form of any award to any one participant, of which a maximum of (i) 50,000 shares may be granted to a participant in the form of stock options and (ii) 30,000 shares may be granted to a participant in the form of Common Stock or restricted stock.

~~Administration~~

The 2008 Plan will be administered by a committee of the Board of Directors (the “Committee”) to be formed after shareholder approval of the 2008 Plan is obtained. The Committee may delegate its duties to a subcommittee as provided in the 2008 Plan. The Committee will determine the persons to whom awards are to be made, determine the type, size, and terms of awards, interpret the 2008 Plan, establish and revise rules and regulations relating to the 2008 Plan, and make any other determinations that it believes necessary for the administration of the 2008 Plan.

~~Eligibility~~

Employees (including any employee who is also a director or an officer), consultants and outside directors of the Company or its subsidiaries whose judgment, initiative, and efforts contributed to or may be expected to contribute to the successful performance of the Company are eligible to participate in the 2008 Plan. As of the Record Date, the Company had 4 employees and 1 outside director who would be eligible under the 2008 Plan.

~~Stock Options~~

The Committee may grant either incentive stock options qualifying under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options. Recipients of stock options may pay the option exercise price by: (i) cash, check, bank draft, or money order payable to the order of the Company; (ii) delivering to the Company shares of Common Stock already owned by the participant having a fair market value equal to the aggregate option exercise price and that the participant has not acquired from the Company within six months prior to the exercise date; (iii) delivering to the Company or its designated agent an executed irrevocable option exercise form together with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the Common Stock purchased upon the exercise of the option or to pledge such shares to the broker as collateral for a loan from the broker and to deliver to the Company the amount of sale or loan proceeds necessary to pay the purchase price; and (iv) any other form of valid consideration that is acceptable to the Committee in its sole discretion.

Stock options will be exercisable as set forth in the option agreements pursuant to which they are issued, but in no event will stock options be exercisable after the expiration of 10 years from the date of grant. Options are not transferable other than by will or the laws of descent and distribution, except that the Committee may permit further transferability of a non-qualified stock option and, unless otherwise provided in the option agreement, a non-qualified stock option may be transferred to: one or more members of the immediate family of the participant; a trust for the benefit of one or more members of the

immediate family of the participant; a partnership, the sole partners of which are the participant, members of the immediate family of the participant, and one or more family trusts; or a foundation in which the participant controls the management of the assets.

~~Restricted Stock and Common Stock~~

Restricted stock consists of shares that are transferred or sold by the Company to a participant, but are subject to substantial risk of forfeiture and to restrictions on their sale or other transfer by the participant. Common Stock consists of shares that are transferred or sold by the Company to a participant without restriction and not subject to a substantial risk of forfeiture. The Committee determines the eligible participants to whom, and the time or times at which, grants of restricted stock and/or Common Stock will be made, the number of shares to be granted, the price to be paid, if any, the time or times within which the shares covered by such grants will be subject to forfeiture, the time or times at which the restrictions will terminate, and all other terms and conditions of the grants. Restrictions or conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with the Company, the passage of time or other restrictions or conditions.

~~Performance Goals~~

Awards of restricted stock or Common Stock under the 2008 Plan may be made subject to the attainment of performance goals within the meaning of Section 162(m) of the Code that consist of one or more or any combination of the following criteria: cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational or other basis); operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings, or similar extraordinary business transactions; sales growth; price of the Common Stock; return on assets, equity or shareholders’ equity; market share; inventory levels, inventory turn or shrinkage; or total return to shareholders (“Performance Criteria”). Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude: (i) extraordinary, unusual, and/or non-recurring items of gain or loss; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting regulations or laws; or (iv) the effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases. In all other respects, Performance Criteria shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an award which is consistently applied and identified in the audited financial statements, including footnotes, or the Management’s Discussion and Analysis section of the Company’s Annual Report on Form 10-K. However, the Committee may not in any event increase the amount of compensation payable to an individual upon the attainment of a Performance Goal.

~~Adjustments Upon Changes in Capitalization~~

The number of shares of Common Stock subject to an award may be adjusted by the Committee, in the manner it deems equitable, in the event that the Committee determines that any dividend or other distribution, recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of Common Stock or other securities, issuance of warrants, or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the Common Stock such

~~that the Committee determines that an adjustment is appropriate to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the 2008 Plan.~~

~~Amendment or Discontinuance of the 2008 Plan~~

The Board of Directors of the Company may, at any time and from time to time, without the consent of the participants, alter, amend, revise, suspend, or discontinue the 2008 Plan; provided, however, that: (i) no amendment that requires shareholder approval in order for the 2008 Plan and any awards under the 2008 Plan to continue to comply with Sections 162(m), 421, and 422 of the Code or any applicable requirements of any securities exchange or inter-dealer quotation system on which the Company’s stock is listed or traded, shall be effective unless such amendment is approved by the requisite vote of the Company’s shareholders entitled to vote on the amendment; and (ii) unless required by law, no action by the Board of Directors of the Company regarding amendment or discontinuance of the 2008 Plan may adversely affect any rights of any participants or obligations of the Company to any participants with respect to any outstanding award under the 2008 Plan without the consent of the affected participant.

~~Plan Benefits~~

~~Future benefits under the 2008 Plan are not currently determinable.~~

~~Federal Income Tax Consequences~~

The following is a brief summary of certain federal income tax consequences relating to the transactions described under the 2008 Plan as set forth below. This summary does not purport to address all aspects of federal income taxation and does not describe state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the treasury regulations issued thereunder (the “Treasury Regulations”), and judicial and administrative interpretations under the Code and Treasury Regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.

~~Law Affecting Deferred Compensation~~

In 2004, a new Section 409A was added to the Code to regulate all types of plans, agreements, and arrangements that provide for deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to federal income tax as it vests, plus an interest charge at the underpayment rate plus a 1% and a 20% penalty tax. Certain stock options, restricted stock, and other forms of equity compensation may also be subject to Section 409A of the Code.

~~Incentive Stock Options~~

A participant will not recognize income at the time an incentive option is granted. When a participant exercises an incentive option, a participant also generally will not be required to recognize income (either as ordinary income or capital gain). However, to the extent that the fair market value (determined as of the date of grant) of the Common Stock with respect to which the participant’s incentive options are exercisable for the first time during any year exceeds $100,000, the incentive options for the Common Stock over $100,000 will be treated as nonqualified options, and not incentive options, for federal tax purposes, and the participant will recognize income as if the incentive options were nonqualified options.

~~In addition to the foregoing, if the fair market value of the Common Stock received upon exercise of an incentive option exceeds the exercise price, then the excess may be deemed a tax preference~~

adjustment for purposes of the federal alternative minimum tax calculation. The federal alternative minimum tax may produce significant tax repercussions depending upon the participant’s particular tax status.

The tax treatment of any Common Stock acquired by exercise of an incentive option will depend upon whether the participant disposes of his or her shares prior to two years after the date the incentive option was granted or one year after the common shares were transferred to the participant (referred to as the “Holding Period”). If a participant disposes of Common Stock acquired by exercise of an incentive option after the expiration of the Holding Period, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the Common Stock. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.

If the participant disposes of Common Stock acquired by exercise of an incentive option prior to the expiration of the Holding Period, the disposition will be considered a “disqualifying disposition.” If the amount received for the Common Stock is greater than the fair market value of the Common Stock on the exercise date, then the difference between the incentive option’s exercise price and the fair market value of the Common Stock at the time of exercise will be treated as ordinary income for the tax year in which the “disqualifying disposition” occurs. The participant’s basis in the Common Stock will be increased by an amount equal to the amount treated as ordinary income due to such “disqualifying disposition.” In addition, the amount received in such “disqualifying disposition” over the participant’s increased basis in the Common Stock will be treated as capital gain. However, if the price received for Common Stock acquired by exercise of an incentive option is less than the fair market value of the Common Stock on the exercise date and the disposition is a transaction in which the participant sustains a loss which otherwise would be recognizable under the Code, then the amount of ordinary income that the participant will recognize is the excess, if any, of the amount realized on the “disqualifying disposition” over the basis of the Common Stock.

~~Non-qualified Stock Options~~

A participant generally will not recognize income at the time a non-qualified option is granted. When a participant exercises a non-qualified option, the difference between the option price and any higher market value of the Common Stock on the date of exercise will be treated as compensation taxable as ordinary income to the participant. The participant’s tax basis for Common Stock acquired under a non-qualified option will be equal to the option price paid for such Common Stock, plus any amounts included in the participant’s income as compensation. When a participant disposes of Common Stock acquired by exercise of a non-qualified option, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the Common Stock. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as short-term or long-term capital loss, depending upon how long the participant has held the shares.

~~Special Rule if Option Price Is Paid for in Common Stock~~

If a participant pays the exercise price of a non-qualified option with previously-owned shares of Common Stock and the transaction is not a disqualifying disposition of Common Stock previously acquired under an incentive option, the shares of Common Stock received equal to the number of shares of Common Stock surrendered are treated as having been received in a tax-free exchange. The participant’s tax basis and holding period for these shares of Common Stock received will be equal to the participant’s tax basis and holding period for the Common Stock surrendered. The Common Stock received in excess of the number of shares of Common Stock surrendered will be treated as compensation

taxable as ordinary income to the participant to the extent of their fair market value. The participant’s tax basis in these shares of Common Stock will be equal to their fair market value on the date of exercise, and the participant’s holding period for such shares will begin on the date of exercise.

If the use of previously acquired Common Stock to pay the exercise price of a non-qualified option constitutes a disqualifying disposition of Common Stock previously acquired under an incentive option, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal to the excess of the fair market value of the Common Stock surrendered, determined at the time such shares of Common Stock were originally acquired on exercise of the incentive option, over the aggregate option price paid for such Common Stock. As discussed above, a disqualifying disposition of Common Stock previously acquired under an incentive option occurs when the participant disposes of such shares before the end of the Holding Period. The other tax results from paying the exercise price with previously-owned shares are as described above, except that the participant’s tax basis in the shares of Common Stock that are treated as having been received in a tax-free exchange will be increased by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.

~~Restricted Stock and Common Stock~~

A participant who receives restricted stock or Common Stock generally will recognize as ordinary income the excess, if any, of the fair market value of the Common Stock or common shares granted as restricted stock at such time as the shares of Common Stock are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the participant for such Common Stock. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code within 30 days of the date of transfer of the Common Stock to recognize ordinary income on the date of transfer of the Common Stock equal to the excess of the fair market value of such shares (determined without regard to the restrictions on such Common Stock) over the purchase price, if any, of such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary income any dividends received with respect to Common Stock. At the time of sale of such shares, any gain or loss realized by the participant will be treated as either short-term or long-term capital gain (or loss) depending on the holding period. For purposes of determining any gain or loss realized, the participant’s tax basis will be the amount previously taxable as ordinary income.

~~Federal Tax Withholding~~

Any ordinary income realized by a participant upon the exercise of an award under the 2008 Plan is subject to withholding of federal, state and local income tax and to withholding of the participant’s share of tax under the Federal Insurance Contribution Act (“FICA”) and the Federal Unemployment Tax Act (“FUTA”).

To satisfy federal income tax withholding requirements, the Company will have the right to require that, as a condition to delivery of any certificate for Common Stock, the participant remit to the Company an amount sufficient to satisfy the withholding requirements. Alternatively, the Company may withhold a portion of the Common Stock (valued at fair market value) that otherwise would be issued to the participant to satisfy all or part of the withholding tax obligations.

Withholding does not represent an increase in the participant’s total income tax obligation, since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant’s tax basis in the Common Stock. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by the Company to employees by January 31 of the succeeding year.

~~Deferred compensation that is subject to Section 409A of the Code is subject to certain federal income tax withholding and reporting requirements, both in the year of the award~~, ~~to the extent of~~ ~~the~~

~~“deferral”~~ ~~amount~~, ~~and in the year~~ ~~the deferral amount~~~~is includible in income. Pursuant to IRS Notices 2005-94~~, ~~2006-100~~~~and 2007-89, for calendar year 2007 (and prior years), the IRS has suspended~~ ~~or waived~~ ~~the reporting requirements for amounts that have merely been deferred, but are not yet taxable, until further IRS guidance is issued. However, beginning in~~ ~~2005~~~~, Notice~~s~~2006-100 and~~2007-89 require employers (or service recipients for non-employees) to report all Section 409A deferred amounts that are includible in income during the calendar year as wages of employees (or taxable income of non-employees), and employers must withhold tax on such amounts payable to employees.

~~Tax Consequences to the Company~~

To the extent that a participant recognizes ordinary income in the circumstances described above, the Company will be entitled to a corresponding deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1 million limitation on certain executive compensation under Section 162(m) of the Code.

~~Million Dollar Deduction Limit and Other Tax Matters~~

The Company may not deduct compensation of more than $1,000,000 that is paid to an individual who, on the last day of the taxable year, is either the Company’s chief executive officer or is among one of the four other most highly-compensated officers for that taxable year as reported in the Company’s proxy statement. The limitation on deductions does not apply to certain types of compensation, including qualified performance-based compensation. The Company does not anticipate that the total compensation paid to any individual employee of the Company, including stock options and restricted stock, will be more than $1,000,000 in any taxable year.

If an individual’s rights under the plan are accelerated as a result of a change in control and the individual is a “disqualified individual” under Section 280G of the Code, the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an “excess parachute payment” under Section 280G of the Code, which could result in: (i) the imposition of a 20% Federal excise tax (in addition to Federal income tax) payable by the individual on the value of such accelerated rights; and (ii) the loss by the Company of a compensation deduction.

~~The affirmative vote of the holders of a majority of the votes cast at the meeting is required to approve the 2008 Stock Awards Plan.~~

~~The Board of Directors recommends that shareholders vote FOR the 2008 Stock Awards Plan.~~

~~PROPOSAL NO. 4~~

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

~~The Board of Directors has appointed~~ RIDER 10A

Lazar Levine & Felix LLP ~~to serve~~(“Lazar”) served as the Company’s independent registered public accounting firm until February 16, 2009, at which time the firm was acquired by Parente Randolph, LLC (“Parente”) in a transaction pursuant to which Lazar merged its operations into Parente and certain of the professional staff and partners of Lazar joined Parente either as employees or partners of Parente. On February 16, 2009, and concurrently with the resignation of Lazar, the Company, through and with the approval of the Company’s Board of Directors, engaged Parente as its independent registered public accounting firm.

Prior to engaging Parente, the Company did not consult with Parente regarding the application of accounting principles to a specific completed or contemplated transaction or regarding the type of audit opinions that might be rendered by Parente on the Company’s financial statements, and Parente did not provide any written or oral advice that was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue.

The reports of the independent registered public accounting firm of Lazar regarding the Company’s financial statements for the fiscal years ended December 31, 2007 and 2006 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that, with respect to the Company’s financial statements for the fiscal years ended December 31, 2007 and 2006, substantial doubt was raised as to the Company’s ability to continue as a going concern. During the years ended December 31, 2007 and 2006, and during the interim period from the end of the most recently completed fiscal year through February 16, 2009, the date of resignation, there were no disagreements with Lazar on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Lazar would have caused it to make reference to such disagreement in its reports.

Proposal No. 42 is for the ratification of the selection of ~~Lazar Levine & Felix LLP~~Parente Randolph, LLC as the Company’s independent registered public accounting firm for the fiscal year ending December 31, ~~2008.~~2009. It is not expected that a representative of ~~Lazar Levine & Felix LLP~~Parente Randolph, LLC will be present at the ~~shareholders~~shareholders’ meeting.

The affirmative vote of the holders of a majority of the votes cast at the meeting is required to ratify the selection of the Company’s independent registered public accounting firm.

~~TABLE OF CONTENTS~~

	~~PAGE~~

~~ARTICLE 1 PURPOSE~~		~~A-1~~

~~ARTICLE 2 DEFINITIONS~~		~~A-1~~
~~2.1~~	~~Award~~	~~A-1~~
~~2.2~~	~~Award Agreement~~	~~A-1~~
~~2.3~~	~~Award Period~~	~~A-1~~
~~2.4~~	~~Board~~	~~A-2~~
~~2.5~~	~~Change in Control~~	~~A-2~~
~~2.6~~	~~Code~~	~~A-2~~
~~2.7~~	~~Committee~~	~~A-2~~
~~2.8~~	~~Common Stock~~	~~A-2~~
~~2.9~~	~~Company~~	~~A-2~~
~~2.10~~	~~Consultant~~	~~A-2~~
~~2.11~~	~~Corporation~~	~~A-3~~
~~2.12~~	~~Date of Grant~~	~~A-3~~
~~2.13~~	~~Employee~~	~~A-3~~
~~2.14~~	~~Fair Market Value~~	~~A-3~~
~~2.15~~	~~Incentive Stock Option~~	~~A-3~~
~~2.16~~	~~Nonqualified Stock Option~~	~~A-3~~
~~2.17~~	~~Option Price~~	~~A-3~~
~~2.18~~	~~Outside Director~~	~~A-3~~
~~2.19~~	~~Participant~~	~~A-3~~
~~2.20~~	~~Plan~~	~~A-3~~
~~2.21~~	~~Performance Goal~~	~~A-3~~
~~2.22~~	~~Reload Stock Option~~	~~A-3~~
~~2.23~~	~~Reporting Participant~~	~~A-3~~
~~2.24~~	~~Restricted Stock~~	~~A-4~~
~~2.25~~	~~Retirement~~	~~A-4~~
~~2.26~~	~~Stock Option~~	~~A-4~~
~~2.27~~	~~Subsidiary~~	~~A-4~~
~~2.28~~	~~Termination of Service~~	~~A-4~~
~~2.29~~	~~Total and Permanent Disability~~	~~A-4~~

~~ARTICLE 3 ADMINISTRATION~~		~~A-5~~
~~3.1~~	~~General Administration; Establishment of Committee~~	A-5
~~3.2~~	~~Designation of Participants and Awards~~	A-5
~~3.3~~	~~Authority of the Committee~~	A-5

~~ARTICLE 4 ELIGIBILITY~~		~~A-6~~

~~ARTICLE 5~~ ~~SHARES SUBJECT TO PLAN~~		~~A-6~~
~~5.1~~	~~Number Available~~0 --------------- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ---------------- 14475 CHASE PACKAGING CORPORATION COMMON STOCK PROXY Proxy Solicited on Behalf of the Board of Directors for ~~Awards~~	A-6
~~5.2~~	~~Reuse~~the Annual Meeting of ~~Shares~~	A-6Shareholders, June 2, 2009 The undersigned hereby appoint(s) Herbert M. Gardner or Ann C.W. Green, each with full power of substitution, as proxies, to vote all Common Stock in Chase Packaging Corporation which the undersigned would be entitled to vote on all matters which may come before the Annual Meeting of the Shareholders of the Company to be held on June 2, 2009, and any adjournments thereof. THE PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL NO. 2. (Continued and to be signed on the reverse side)

~~A-i~~

~~ARTICLE 6 GRANT OF AWARDS~~		A-7
~~6.1~~	~~In General~~	A-7
~~6.2~~	~~Option Price~~	A-7
~~6.3~~	~~Maximum ISO Grants~~	A-7
~~6.4~~	~~Restricted Stock~~	A-7
~~6.5~~	~~Performance Goals~~	A-9

~~ARTICLE 7 AWARD PERIOD; VESTING~~		A-9
~~7.1~~	~~Award Period~~	A-9
~~7.2~~	~~Vesting~~	A-10

~~ARTICLE 8 EXERCISE OR CONVERSION OF AWARDS~~		A-10
~~8.1~~	~~In General~~	A-10
~~8.2~~	~~Securities Law and Exchange Restrictions~~	A-10
~~8.3~~	~~Exercise of Stock Option~~	A-10
~~8.4~~	~~Disqualifying Disposition of Incentive Stock Option~~	A-12

~~ARTICLE 9 AMENDMENT OR DISCONTINUANCE~~		~~A-12~~

~~ARTICLE 10 TERM~~		~~A-12~~

~~ARTICLE 11 CAPITAL ADJUSTMENTS~~		~~A-12~~

~~ARTICLE 12 RECAPITALIZATION, MERGER, AND CONSOLIDATION~~		A-13
~~12.1~~	~~No Effect on Company’s Authority~~	A-13
~~12.2~~	~~Conversion of Awards Where Company Survives~~	A-13
~~12.3~~	~~Exchange or Cancellation of Awards Where Company Does Not Survive~~	A-13
~~12.4~~	~~Cancellation of Awards~~	A-13

~~ARTICLE 13 LIQUIDATION OR DISSOLUTION~~		~~A-14~~

~~ARTICLE 14 AWARDS IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER ENTITIES~~		~~A-15~~

~~ARTICLE 15 MISCELLANEOUS PROVISIONS~~		A-15
~~15.1~~	~~Investment Intent~~	A-15
~~15.2~~	~~No Right to Continued Employment~~	A-15
~~15.3~~	~~Indemnification of Board and Committee~~	A-15
~~15.4~~	~~Effect of the Plan~~	A-15
~~15.5~~	~~Compliance With Other Laws and Regulations~~	A-15
~~15.6~~	~~Tax Requirements~~	A-16
~~15.7~~	~~Assignability~~	A-16
~~15.8~~	~~Use of Proceeds~~	A-17
~~15.9~~	~~Execution of Receipts and Releases~~	A-17
~~15.10~~	~~Legend~~	A-17

~~A-ii~~

~~2008 STOCK AWARDS PLAN~~

~~CHASE PACKAGING CORPORATION~~

~~The 2008 Stock Awards Plan (the “~~~~Plan~~~~”) of Chase Packaging Corporation, a Texas corporation (the “~~~~Company~~~~”), was adopted by the Company’s Board of Directors effective as of~~ ~~April 9, 2008~~~~, subject to approval by the Company’s shareholders.~~

~~ARTICLE 1~~

~~PURPOSE~~

The purpose of the Plan is to attract and retain the services of key employees, key consultants, and outside directors of the Company and its Subsidiaries and to provide such persons with a proprietary interest in the Company through the granting of incentive stock options, nonqualified stock options, common stock, and restricted stock, that will

~~(a)increase the interest of such persons in the Company’s welfare;~~

~~(b)furnish an incentive to such persons to continue their services for the Company; and~~

~~(c)provide a means through which the Company may attract able persons as Employees, Consultants, and Outside Directors.~~

With respect to Reporting Participants (see definition contained in Article 2), the Plan and all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the “~~1934 Act~~~~”). To the extent that any provision of the Plan or action by the Committee fails to so comply, such provision or action shall be deemed null and void~~ ~~ab initio~~ ~~to the extent permitted by law and deemed advisable by the Committee.~~

~~ARTICLE 2~~

~~DEFINITIONS~~

~~For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:~~

~~2.1~~“~~Award~~~~” means the grant of any Incentive Stock Option, Nonqualified Stock Option, Reload Option, Common Stock, or Restricted Stock.~~

~~2.2~~“~~Award Agreement~~~~” means a written agreement between a Participant and the Company which sets out the terms of the grant of an Award.~~

~~2.3~~“~~Award Period~~~~” means the period set forth in the Award Agreement during which one or more Awards may be exercised.~~

~~A-1~~

~~2.4~~“~~Board”~~ ~~means the board of directors of the Company.~~

~~2.5~~“~~Change in Control~~” means any of the following, except as otherwise provided herein: (i) any consolidation, merger, or share exchange of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities, or other property, other than a consolidation, merger, or share exchange of the Company in which the holders of the Company’s Common Stock immediately prior to such transaction have the same proportionate ownership of Common Stock of the surviving corporation immediately after such transaction; (ii) any sale, lease, exchange, or other transfer (excluding transfer by way of pledge or hypothecation) in one transaction or a series of related transactions, of all or substantially all of the assets of the Company; (iii) the shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; (iv) the cessation of control (by virtue of their not constituting a majority of directors) of the Board by the individuals (the “~~Continuing Directors~~”) who (x) at the date of this Plan were directors or (y) become directors after the date of this Plan and whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the directors then in office who were directors at the date of this Plan or whose election or nomination for election was previously so approved; (v) the acquisition of beneficial ownership (within the meaning of Rule 13d-3 under the 1934 Act) of an aggregate of 50% or more of the voting power of the Company’s outstanding voting securities by any person or group (as such term is used in Rule 13d-5 under the 1934 Act) who beneficially owned less than 50% of the voting power of the Company’s outstanding voting securities on the date of this Plan; ~~provided~~, ~~however~~, that notwithstanding the foregoing, an acquisition shall not constitute a Change in Control hereunder if the acquirer is (x) a trustee or other fiduciary holding securities under an employee benefit plan of the Company and acting in such capacity, (y) a Subsidiary of the Company or a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of voting securities of the Company or (z) any other person whose acquisition of shares of voting securities is approved in advance by a majority of the Continuing Directors; or (vi) in a Title 11 bankruptcy proceeding, the appointment of a trustee or the conversion of a case involving the Company to a case under Chapter 7.

~~Notwithstanding the foregoing provisions of this~~ ~~Section 2.5~~, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Change in Control” for purposes of such Award shall be the definition provided for under Section 409A of the Code and the regulations or other guidance issued thereunder.

~~2.6~~“~~Code~~~~” means the Internal Revenue Code of 1986, as amended.~~

~~2.7~~“~~Committee~~~~” means the committee appointed or designated by the Board to administer the Plan in accordance with~~ ~~Article 3~~ ~~of this Plan.~~

~~2.8~~“~~Common Stock~~” means the common stock, par value $0.10 per share, which the Company is currently authorized to issue or may in the future be authorized to issue, or any securities into which or for which the common stock of the Company may be converted or exchanged, as the case may be, pursuant to the terms of this Plan.

~~2.9~~“~~Company~~~~” means Chase Packaging Corporation, a Texas corporation, and any successor entity.~~

~~2.10~~“~~Consultant~~~~” means~~ ~~any person, who is not an Employee, performing advisory or consulting services for the Company or a Subsidiary, with or without compensation, provided that~~ ~~bona fide~~ ~~services must be rendered by such person, and such services shall not be rendered in connection with the offer or sale of securities in a capital raising transaction.~~

~~A-2~~

~~2.11~~“~~Corporation~~” means any entity that (i) is defined as a corporation under Section 7701 of the Code and (ii) is the Company or is in an unbroken chain of corporations (other than the Company) beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain. For purposes of clause (ii) hereof, an entity shall be treated as a “corporation” if it satisfies the definition of a corporation under Section 7701 of the Code.

~~2.12~~“~~Date of Grant~~” means the effective date on which an Award is made to a Participant as set forth in the applicable Award Agreement; provided, however, that solely for purposes of Section 16 of the 1934 Act and the rules and regulations promulgated thereunder, the Date of Grant of an Award shall be the date of shareholder approval of the Plan if such date is later than the effective date of such Award as set forth in the Award Agreement.

~~2.13~~“~~Employee~~~~” means common law employee (as defined in accordance with the Regulations and Revenue Rulings then applicable under Section 3401(c) of the Code) of the Company or any Subsidiary of the Company.~~

~~2.14~~“~~Fair Market Value~~” means, if the Common Stock is traded on one or more established markets or exchanges, the mean of the opening and closing prices of the Common Stock on the primary market or exchange on which the Common Stock is traded, and if the Common Stock is not so traded or the Common Stock does not trade on the relevant date, the value determined in good faith by the Board of Directors using a reasonable valuation method in accordance with the provisions of Section 409A of the Code. For purposes of valuing Incentive Stock Options, the Fair Market Value of the Common Stock shall be determined without regard to any restriction other than one which, by its terms, will never lapse.

~~2.15~~“~~Incentive Stock Option~~~~” means an incentive stock option, within the meaning of Section 422 of the Code, granted pursuant to this Plan.~~

~~2.16~~“~~Nonqualified Stock Option~~~~” means a nonqualified stock option, granted pursuant to this Plan, which is not an Incentive Stock Option.~~

~~2.17~~“~~Option Price~~~~” means the price which must be paid by a Participant upon exercise of a Stock Option to purchase a share of Common Stock.~~

~~2.18~~~~“Outside Director”~~ ~~means a director of the Company who is not an Employee.~~

~~2.19~~“~~Participant~~~~” means an Employee, Consultant, or Outside Director of the Company or a Subsidiary to whom an Award is granted under this Plan.~~

~~2.20~~“~~Plan~~~~” means this 2008 Stock Awards Plan of Chase Packaging Corporation, as amended from time to time.~~

~~2.21~~“~~Performance Goal~~~~” means any of the goals set forth in~~ ~~Section 6.5~~ ~~hereof.~~

~~2.22~~“~~Reload Stock Option~~~~” means a Nonqualified Stock Option or an Incentive Stock Option granted pursuant to~~ ~~Section 8.3(c)~~ ~~hereof.~~

~~2.23~~“~~Reporting Participant~~~~” means a Participant who is subject to the reporting requirements of Section 16 of the 1934 Act.~~

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~~2.24~~“~~Restricted Stock~~~~” means shares of Common Stock issued or transferred to a Participant pursuant to~~ ~~Section 6.4~~ ~~of this Plan which are subject to restrictions or limitations set forth in this Plan and in the related Award Agreement.~~

~~2.25~~“~~Retirement~~~~” means any Termination of Service solely due to retirement upon or after attainment of age sixty-five (65), or permitted early retirement as determined by the Committee.~~

~~2.26~~“~~Stock Option~~~~” means a Nonqualified Stock Option, a Reload Stock Option, or an Incentive Stock Option.~~

~~2.27~~“~~Subsidiary~~” means (i) any corporation in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing a majority of the total combined voting power of all classes of stock in one of the other corporations in the chain, (ii) any limited partnership, if the Company or any corporation described in item (i) above owns a majority of the general partnership interest and a majority of the limited partnership interests entitled to vote on the removal and replacement of the general partner, and (iii) any partnership or limited liability company, if the partners or members thereof are composed only of the Company, any corporation listed in item (i) above, or any limited partnership listed in item (ii) above. “Subsidiaries” means more than one of any such corporations, limited partnerships, partnerships or limited liability companies.

~~2.28~~“~~Termination of Service~~” occurs when a Participant who is: (i) an Employee of the Company or any Subsidiary ceases to serve as an Employee of the Company and its Subsidiaries, for any reason; (ii) an Outside Director of the Company or a Subsidiary ceases to serve as a director of the Company and its Subsidiaries for any reason; or (iii) a Consultant of the Company or a Subsidiary ceases to serve as a Consultant of the Company and its Subsidiaries for any reason. Except as may be necessary or desirable to comply with applicable federal or state law, a “Termination of Service” shall not be deemed to have occurred when a Participant who is an Employee becomes an Outside Director or Consultant or vice versa. If, however, a Participant who is an Employee and who has an Incentive Stock Option ceases to be an Employee but does not suffer a Termination of Service, and if that Participant does not exercise the Incentive Stock Option within the time required under Section 422 of the Code upon ceasing to be an Employee, the Incentive Stock Option shall thereafter become a Nonqualified Stock Option. Notwithstanding the foregoing provisions of this ~~Section 2.28~~, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Termination of Service” for purposes of such Award shall be the definition of “separation from service” provided for under Section 409A of the Code and the regulations or other guidance issued thereunder.

~~2.29~~“~~Total and Permanent Disability~~” means a Participant is qualified for long-term disability benefits under the Company’s or Subsidiary’s disability plan or insurance policy; or, if no such plan or policy is then in existence or if the Participant is not eligible to participate in such plan or policy, that the Participant, because of a physical or mental condition resulting from bodily injury, disease, or mental disorder is unable to perform his or her duties of employment for a period of six (6) continuous months, as determined in good faith by the Committee, based upon medical reports or other evidence satisfactory to the Committee; ~~providedthat~~, with respect to any Incentive Stock Option, Total and Permanent Disability shall have the meaning given it under the rules governing Incentive Stock Options under the Code. Notwithstanding the foregoing provisions of this ~~Section 2.29~~, in the event an Award issued under the Plan is subject to Section 409A of the Code, then, in lieu of the foregoing definition and to the extent necessary to comply with the requirements of Section 409A of the Code, the definition of “Total and Permanent Disability” for purposes of such Award shall be the definition of “disability” provided for under Section 409A of the Code and the regulations or other guidance issued thereunder.

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~~ARTICLE 3~~

~~ADMINISTRATION~~

~~3.1~~~~General Administration; Establishment of Committee~~~~. Subject to the terms of this~~ ~~Article 3, the Plan shall be administered by the Board or such committee (the “~~~~Committee~~”) of the Board as is designated by the Board to administer the Plan. The Committee shall consist of between three and six persons. Any member of the Committee may be removed at any time, with or without cause, by resolution of the Board. Any vacancy occurring in the membership of the Committee may be filled by appointment by the Board. At any time there is no Committee to administer the Plan, any references in this Plan to the Committee shall be deemed to refer to the Board.

In the event the Board decides that Awards shall constitute “performance-based compensation” (within the meaning of Section 162(m) of the Code), membership on the Committee shall be limited to those members of the Board who are “outside directors” under Section 162(m) of the Code and “non-employee directors” as defined in Rule 16b-3 promulgated under the 1934 Act. The Committee shall select one of its members to act as its Chairman. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee.

~~3.2~~~~Designation of Participants and Awards~~. The Committee or the Board shall determine and designate from time to time the eligible persons to whom Awards will be granted and shall set forth in each related Award Agreement, where applicable, the Award Period, the Date of Grant, and such other terms, provisions, limitations, and performance requirements, as are approved by the Committee, but not inconsistent with the Plan. Although the members of the Committee shall be eligible to receive Awards, all decisions with respect to any Award, and the terms and conditions thereof, to be granted under the Plan to any member of the Committee shall be made solely and exclusively by the other members of the Committee, or if such member is the only member of the Committee, by the Board.

~~3.3~~~~Authority of the Committee.~~ The Committee, in its discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and rescind any rules and regulations necessary or appropriate for the administration of the Plan, (iii) establish performance goals for an Award and certify the extent of their achievement, and (iv) make such other determinations or certifications and take such other action as it deems necessary or advisable in the administration of the Plan. Any interpretation, determination, or other action made or taken by the Committee shall be final, binding, and conclusive on all interested parties. The Committee’s discretion set forth herein shall not be limited by any provision of the Plan, including any provision which by its terms is applicable notwithstanding any other provision of the Plan to the contrary.

The Committee may delegate to officers of the Company, pursuant to a written delegation, the authority to perform specified functions under the Plan. Any actions taken by any officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken by the Committee.

With respect to restrictions in the Plan that are based on the requirements of Rule 16b-3 promulgated under the 1934 Act, Section 422 of the Code, Section 162(m) of the Code, the rules of any exchange or inter-dealer quotation system upon which the Company’s securities are listed or quoted, or any other applicable law, rule, or restriction (collectively, “~~applicable law~~”), to the extent that any such restrictions are no longer required by applicable law, the Committee shall have the sole discretion and authority to grant Awards that are not subject to such mandated restrictions and/or to waive any such mandated restrictions with respect to outstanding Awards.

~~A-5~~

~~ARTICLE 4~~

~~ELIGIBILITY~~

Any Employee (including an Employee who is also a director or an officer), Consultant, or Outside Director of the Company whose judgment, initiative, and efforts contributed or may be expected to contribute to the successful performance of the Company is eligible to participate in the Plan; provided that only Employees of a corporation shall be eligible to receive Incentive Stock Options. The Committee, upon its own action, may grant, but shall not be required to grant, an Award to any Employee, Consultant, or Outside Director of the Company or any Subsidiary. Awards may be granted by the Committee at any time and from time to time to new Participants, or to then Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Committee shall determine. Except as required by this Plan, Awards granted at different times need not contain similar provisions. The Committee’s determinations under the Plan (including without limitation determinations of which Employees, Consultants, or Outside Directors, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among Participants who receive, or are eligible to receive, Awards under the Plan.

~~ARTICLE 5~~

~~SHARES SUBJECT TO PLAN~~

~~5.1~~~~Number Available for Awards~~~~. Subject to adjustment as provided in~~ ~~Articles 11 and 12~~, the maximum number of shares of Common Stock that may be delivered pursuant to Awards granted under the Plan is 2,000,000 shares, 100% of which may be delivered pursuant to Incentive Stock Options. Subject to adjustment pursuant to ~~Articles 11 and 12~~, no Participant may receive in any calendar year (i) Stock Options relating to more than 50,000 shares of Common Stock, or (ii) Common Stock or Restricted Stock relating to more than 30,000 shares of Common Stock; provided, however, that all such Awards to any Participant during any calendar year shall not exceed an aggregate of more than 80,000 shares of Common Stock. Shares to be issued may be made available from authorized but unissued Common Stock, Common Stock held by the Company in its treasury, or Common Stock purchased by the Company on the open market or otherwise. During the term of this Plan, the Company shall at all times reserve and keep available the number of shares of Common Stock that will be sufficient to satisfy the requirements of this Plan.

~~5.2~~~~Reuse of Shares~~. To the extent that any Award under this Plan is forfeited, expires, or is canceled, in whole or in part, then the number of shares of Common Stock covered by the Award or stock option so forfeited, expired, or canceled may again be awarded pursuant to the provisions of this Plan. In the event that previously acquired shares of Common Stock are delivered to the Company in full or partial payment of the exercise price for the exercise of a Stock Option granted under this Plan, the number of shares of Common Stock available for future Awards under this Plan shall be reduced only by the net number of shares of Common Stock issued upon the exercise of the Stock Option. Awards that may be satisfied either by the issuance of shares of Common Stock or by cash or other consideration shall be counted against the maximum number of shares of Common Stock that may be issued under this Plan only during the period that the Award is outstanding or to the extent the Award is ultimately satisfied by the issuance of shares of Common Stock. Notwithstanding any provisions of the Plan to the contrary, only shares forfeited back to the Company, shares canceled on account of termination, expiration or lapse of an Award, shares surrendered in payment of the exercise price of an option, or shares withheld for payment of applicable employment taxes and/or withholding obligations resulting from the exercise of an option shall again be available for grant of Incentive Stock Options under the Plan, but shall not increase the maximum number of shares described in ~~Section 5.1~~ ~~above as the maximum number of shares of Common Stock that may be delivered pursuant to Incentive Stock Options.~~

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~~ARTICLE 6~~

~~GRANT OF AWARDS~~

~~6.1~~~~In General.~~

~~(a)~~The grant of an Award shall be authorized by the Committee and shall be evidenced by an Award Agreement setting forth the Award or Awards being granted, the total number of shares of Common Stock subject to the Award(s), the Option Price (if applicable), the Award Period, the Date of Grant, and such other terms, provisions, limitations, and performance objectives, as are approved by the Committee, but (i) not inconsistent with the Plan and (ii) to the extent an Award issued under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. The Company shall execute an Award Agreement with a Participant after the Committee approves the issuance of an Award. Any Award granted pursuant to this Plan must be granted within ten (10) years of the date of adoption of this Plan. The Plan shall be submitted to the Company’s shareholders~~for approval; however, the Committee may grant Awards under the Plan prior to the time of shareholderapproval. Any such Award granted prior to such shareholderapproval shall be made subject to such shareholderapproval. The grant of an Award to a Participant shall not be deemed either to entitle the Participant to, or to disqualify the Participant from, receipt of any other Award under the Plan.~~

~~(b)~~If the Committee establishes a purchase price for an Award, the Participant must accept such Award within a period of thirty (30) days (or such shorter period as the Committee may specify) after the Date of Grant by executing the applicable Award Agreement and paying such purchase price (if applicable).

~~6.2~~~~Option Price.~~ The Option Price for any share of Common Stock which may be purchased under a Nonqualified Stock Option for any share of Common Stock may be equal to or greater than the Fair Market Value of the share on the Date of Grant. The Option Price for any share of Common Stock which may be purchased under an Incentive Stock Option must be at least equal to the Fair Market Value of the share on the Date of Grant; if an Incentive Stock Option is granted to an Employee who owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than ten percent (10%) of the combined voting power of all classes of stock of the Company (or any parent or Subsidiary), the Option Price shall be at least 110% of the Fair Market Value of the Common Stock on the Date of Grant.

~~6.3~~~~Maximum ISO Grants.~~ The Committee may not grant Incentive Stock Options under the Plan to any Employee which would permit the aggregate Fair Market Value (determined on the Date of Grant) of the Common Stock with respect to which Incentive Stock Options (under this and any other plan of the Company and its Subsidiaries) are exercisable for the first time by such Employee during any calendar year to exceed $100,000. To the extent any Stock Option granted under this Plan which is designated as an Incentive Stock Option exceeds this limit or otherwise fails to qualify as an Incentive Stock Option, such Stock Option (or any such portion thereof) shall be a Nonqualified Stock Option. In such case, the Committee shall designate which stock will be treated as Incentive Stock Option stock by causing the issuance of a separate stock certificate and identifying such stock as Incentive Stock Option stock on the Company’s stock transfer records.

~~6.4~~~~Restricted Stock.~~ If Restricted Stock is granted to or received by a Participant under an Award, the Committee shall set forth in the related Award Agreement: (i) the number of shares of Common Stock awarded, (ii) the price, if any, to be paid by the Participant for such Restricted Stock and the method of payment of the price, (iii) the time or times within which such Award may be subject to forfeiture, (iv) specified Performance Goals of the Company, a Subsidiary, any division thereof or any group of Employees of

~~A-7~~

the Company, or other criteria, which the Committee determines must be met in order to remove any restrictions (including vesting) on such Award, and (v) all other terms, limitations, restrictions, and conditions of the Restricted Stock, which shall be consistent with this Plan and to the extent a Restricted Stock granted under the Plan is subject to Section 409A of the Code, in compliance with the applicable requirements of Section 409A of the Code and the regulations or other guidance issued thereunder. The provisions of Restricted Stock need not be the same with respect to each Participant.

~~(a)~~~~Legend on Shares.~~ Each Participant who is awarded or receives Restricted Stock shall be issued a stock certificate or certificates in respect of such shares of Common Stock. Such certificate(s) shall be registered in the name of the Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, substantially as provided in ~~Section 15.10~~ ~~of the Plan.~~

~~(b)~~~~Restrictions and Conditions.~~ ~~Shares of Restricted Stock shall be subject to the following restrictions and conditions:~~

~~(i)~~Subject to the other provisions of this Plan and the terms of the particular Award Agreements, during such period as may be determined by the Committee commencing on the Date of Grant or the date of exercise of an Award (the “~~Restriction Period~~”), the Participant shall not be permitted to sell, transfer, pledge, or assign shares of Restricted Stock. Except for these limitations, the Committee may, in its sole discretion, remove any or all of the restrictions on such Restricted Stock whenever it may determine that, by reason of changes in applicable laws or other changes in circumstances arising after the date of the Award, such action is appropriate.

~~(ii)~~Except as provided in sub-paragraph (i) above or in the applicable Award Agreement, the Participant shall have, with respect to his or her Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the shares and the right to receive any dividends thereon. Certificates for shares of Common Stock free of restriction under this Plan shall be delivered to the Participant promptly after, and only after, the Restriction Period has expired without forfeiture in respect of such shares of Common Stock or after any other restrictions imposed on such shares of Common Stock by the applicable Award Agreement or other agreement have expired. Certificates for the shares of Common Stock forfeited under the provisions of the Plan and the applicable Award Agreement shall be promptly returned to the Company by the forfeiting Participant. Each Award Agreement shall require that each Participant, in connection with the issuance of a certificate for Restricted Stock, shall endorse such certificate in blank or execute a stock power in form satisfactory to the Company in blank and deliver such certificate and executed stock power to the Company.

~~(iii)The Restriction Period of Restricted Stock shall commence on the Date of Grant, as specified in the Award Agreement, and, subject to~~ ~~Article 12~~ of the Plan, unless otherwise established by the Committee in the Award Agreement setting forth the terms of the Restricted Stock, shall expire upon satisfaction of the conditions set forth in the Award Agreement; such conditions may provide for vesting based on such Performance Goals as may be determined by the Committee in its sole discretion.

~~(iv)~~Except as otherwise provided in the particular Award Agreement, upon Termination of Service for any reason during the Restriction Period, the nonvested shares of Restricted Stock shall be forfeited by the Participant. In the event a Participant has paid any consideration to the Company for such forfeited Restricted Stock, the Committee shall specify in the Award Agreement that either (i) the Company shall be obligated to, or (ii) the Company

~~A-8~~

may, in its sole discretion, elect to, pay to the Participant, as soon as practicable after the event causing forfeiture, in cash, an amount equal to the lesser of the total consideration paid by the Participant for such forfeited shares or the Fair Market Value of such forfeited shares as of the date of Termination of Service, as the Committee, in its sole discretion shall select. Upon any forfeiture, all rights of a Participant with respect to the forfeited shares of the Restricted Stock shall cease and terminate without any further obligation on the part of the Company.

~~6.5~~~~Performance Goals.~~ Awards of Common Stock or Restricted Stock under the Plan may be made subject to the attainment of Performance Goals relating to one or more business criteria which, where applicable, shall be within the meaning of Section 162(m) of the Code and consist of one or more or any combination of the following criteria: cash flow; cost; revenues; sales; ratio of debt to debt plus equity; net borrowing, credit quality or debt ratings; profit before tax; economic profit; earnings before interest and taxes; earnings before interest, taxes, depreciation and amortization; gross margin; earnings per share (whether on a pre-tax, after-tax, operational or other basis); operating earnings; capital expenditures; expenses or expense levels; economic value added; ratio of operating earnings to capital spending or any other operating ratios; free cash flow; net profit; net sales; net asset value per share; the accomplishment of mergers, acquisitions, dispositions, public offerings or similar extraordinary business transactions; sales growth; price of the Company’s Common Stock; return on assets, equity, or shareholders’ equity; market share; inventory levels; inventory turn or shrinkage; or total return to shareholders (“~~Performance Criteria~~”). Any Performance Criteria may be used to measure the performance of the Company as a whole or any business unit of the Company and may be measured relative to a peer group or index. Any Performance Criteria may include or exclude (i) extraordinary, unusual, and/or non-recurring items of gain or loss, (ii) gains or losses on the disposition of a business, (iii) changes in tax or accounting regulations or laws, or (iv) the effect of a merger or acquisition, as identified in the Company’s quarterly and annual earnings releases. In all other respects, Performance Criteria shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles, or under a methodology established by the Committee prior to the issuance of an Award which is consistently applied and identified in the audited financial statements, including footnotes, or the Management Discussion and Analysis section of the Company’s annual report. However, to the extent Section 162(m) of the Code is applicable, the Committee may not in any event increase the amount of compensation payable to an individual upon the attainment of a Performance Goal.

~~ARTICLE 7~~

~~AWARD PERIOD; VESTING~~

~~7.1~~~~Award Period.~~ Subject to the other provisions of this Plan, the Committee may, in its discretion, provide that an Award may not be exercised in whole or in part for any period or periods of time or beyond any date specified in the Award Agreement. Except as provided in the Award Agreement, a vested Award may be exercised in whole or in part at any time during its term. The Award Period for an Award shall be reduced or terminated upon Termination of Service. No Award granted under the Plan may be exercised at any time after the end of its Award Period. No portion of any Award may be exercised after the expiration of ten (10) years from its Date of Grant. However, if an Employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than ten percent (10%) of the combined voting power of all classes of stock of the Company (or any parent or Subsidiary) and an Incentive Stock Option is granted to such Employee, the term of such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no more than five (5) years from the Date of Grant. Notwithstanding the foregoing and unless the applicable Award Agreement provides otherwise, (i) in the event an Outside Director suffers a Termination of Service, such Outside Director shall have a period of ninety (90) days following such Termination of Service to exercise his then unexercised (but vested) Nonqualified Stock Options; and (ii) in the event an Employee or Consultant suffers a Termination of Service, the Committee shall have the full power and authority, but shall not be obligated, to extend (either at the time the Award is granted or at any time while the

~~A-9~~

Award remains outstanding) the period of time for which an Award is to remain exercisable following the Employee’s or Consultant’s Termination of Service from the period set forth in the applicable Award Agreement, provided, however, in not event shall the Committee extend such exercise period if such extension would cause the Award to be subject to the requirements of Section 409A of the Code.

~~7.2~~~~Vesting.~~ The Committee, in its sole discretion, may determine that an Award will be immediately vested in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its Date of Grant, or until the occurrence of one or more specified events, subject in any case to the terms of the Plan. If the Committee imposes conditions upon vesting, then, subsequent to the Date of Grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Award may be vested. Notwithstanding the foregoing, (i) upon the effective date of a Change in Control, all Awards shall be immediately vested, in whole; and (ii) upon the Participant’s death or Total and Permanent Disability, the portion of the Participant’s Awards that would have vested had the Participant remained employed through the vesting date immediately following the date of such death or Total and Permanent Disability (or, in the event vesting is based upon the attainment of one or more Performance Goals, the pro-rata portion of the Participant’s Awards that would have vested had the Participant remained employed through the vesting date immediately following the date of such death or Total and Permanent Disability, or such other date as may be determined by the Committee, in its sole discretion), shall be immediately vested.

~~ARTICLE 8~~

~~EXERCISE OR CONVERSION OF AWARDS~~

~~8.1~~~~In General~~~~. A vested Award may be exercised or converted, during its Award Period, subject to limitations and restrictions set forth in the Award Agreement~~

~~8.2~~~~Securities Law and Exchange Restrictions.~~ In no event may an Award be exercised or shares of Common Stock be issued pursuant to an Award if a necessary listing or quotation of the shares of Common Stock on a stock exchange or inter-dealer quotation system or any registration under state or federal securities laws required under the circumstances has not been accomplished.

~~8.3~~~~Exercise of Stock Option.~~

~~(a)~~~~In General.~~ If the Committee imposes conditions upon exercise, then subsequent to the Date of Grant, the Committee may, in its sole discretion, accelerate the date on which all or any portion of the Stock Option may be exercised. No Stock Option may be exercised for a fractional share of Common Stock. The granting of a Stock Option shall impose no obligation upon the Participant to exercise that Stock Option.

~~(b)~~~~Notice and Payment.~~ Subject to such administrative regulations as the Committee may from time to time adopt, a Stock Option may be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the Stock Option is to be exercised and the date of exercise thereof (the “~~Exercise Date~~”) which shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to be purchased, payable as provided in the Award Agreement, which may provide for payment in any one or more of the following ways: (a) cash or check, bank draft, or money order payable to the order of the Company; (b) Common Stock (including Restricted Stock) owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within six (6) months prior to the Exercise Date (“stock-for-stock exercise”); (c) with the consent of the Committee, by delivery

~~A-10~~

(including by FAX) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price (“cashless exercise method”); and/or (d) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered.

~~(c) Reload Stock Options.~~ ~~In the event that shares of Common Stock are delivered by a Participant in payment of all or a portion of the exercise price of a Stock Option as set forth in~~ ~~Section 8.3(b)~~ ~~above and/or shares of Common Stock are delivered to or withheld by the Company in satisfaction of the Company’s tax withholding obligations upon exercise in accordance with~~ ~~Section 15.6~~ ~~hereof, then, subject to~~ ~~Article 10~~ hereof, then, if and to the extent authorized by the Committee, such Participant may be eligible for the grant of a replacement Nonqualified Stock Option (or if the Participant is exercising an Incentive Stock Option, a replacement Incentive Stock Option) (in either case, a “~~Reload Stock Option~~”), to purchase that number of shares so delivered to or withheld by the Company, as the case may be, at an option exercise price equal to the Fair Market Value per share of the Common Stock on the date of exercise of the original Stock Option (subject to the provisions of the Plan regarding Incentive Stock Options and, in any event not less than the par value per share of the Common Stock). The option period for a Reload Stock Option will commence on its Date of Grant and expire on the expiration date of the original Stock Option it replaces (subject to the provisions of the Plan regarding Incentive Stock Options), after which period the Reload Stock Option cannot be exercised. The Date of Grant of a Reload Stock Option shall be the date that the Stock Option it replaces is exercised. A Reload Stock Option cannot be exercised by the Participant until the later of: (i) the exercise dates specified in the original Stock Option or (ii) six (6) months after the Date of Grant of the Reload Stock Option. It shall be a condition to the grant of a Reload Stock Option that promptly after its Date of Grant, a stock option agreement shall be delivered to the Participant and executed by the Participant and the Company which sets forth the total number of shares subject to the Reload Stock Option, the option exercise price, the option period of the Reload Stock Option, and such other terms and provisions as are consistent with the Plan.

~~(d) Issuance of Certificate.~~ ~~Except as otherwise provided in~~ ~~Section 6.4~~ hereof (with respect to shares of Restricted Stock) or in the applicable Award Agreement, upon payment of all amounts due from the Participant, the Company shall cause certificates for the Common Stock then being purchased to be delivered as directed by the Participant (or the person exercising the Participant’s Stock Option in the event of his death) at its principal business office promptly after the Exercise Date; provided that if the Participant has exercised an Incentive Stock Option, the Company may at its option retain physical possession of the certificate evidencing the shares acquired upon exercise until the expiration of the holding periods described in Section 422(a)(1) of the Code. The obligation of the Company to deliver shares of Common Stock shall, however, be subject to the condition that, if at any time the Committee determines in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock thereunder, the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

~~A-11~~

~~(e) Failure to Pay.~~ Except as may otherwise be provided in an Award Agreement, if the Participant fails to pay for any of the Common Stock specified in such notice or fails to accept delivery thereof, that portion of the Participant’s Stock Option and right to purchase such Common Stock may be forfeited by the Company.

~~8.4 Disqualifying Disposition of Incentive Stock Option.~~ If shares of Common Stock acquired upon exercise of an Incentive Stock Option are disposed of by a Participant prior to the expiration of either two (2) years from the Date of Grant of such Stock Option or one (1) year from the transfer of shares of Common Stock to the Participant pursuant to the exercise of such Stock Option, or in any other disqualifying disposition within the meaning of Section 422 of the Code, such Participant shall notify the Company in writing of the date and terms of such disposition. A disqualifying disposition by a Participant shall not affect the status of any other Stock Option granted under the Plan as an Incentive Stock Option within the meaning of Section 422 of the Code.

~~ARTICLE 9~~

~~AMENDMENT OR DISCONTINUANCE~~

~~Subject to the limitations set forth in this~~ ~~Article 9~~, the Board may at any time and from time to time, without the consent of the Participants, alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided, however, that no amendment for which shareholder approval is required either (i) by any securities exchange or inter-dealer quotation system on which the Common Stock is listed or traded or (ii) in order for the Plan and Awards awarded under the Plan to continue to comply with Sections 162(m), 421, and 422 of the Code, including any successors to such Sections; shall be effective unless such amendment shall be approved by the requisite vote of the shareholders of the Company entitled to vote thereon. Any such amendment shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding Awards theretofore granted under the Plan, notwithstanding any contrary provisions contained in any Award Agreement. In the event of any such amendment to the Plan, the holder of any Award outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Committee to any Award Agreement relating thereto. Notwithstanding anything contained in this Plan to the contrary, unless required by law, no action contemplated or permitted by this ~~Article 9~~ shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Award theretofore granted under the Plan without the consent of the affected Participant.

~~ARTICLE 10~~

~~TERM~~

~~The Plan shall be effective from the date that this Plan is approved by the Board. Unless sooner terminated by action of the Board, the Plan will terminate on~~ ~~April 8, 2018~~~~, but Awards granted before that date will continue to be effective in accordance with their terms and conditions.~~

~~ARTICLE 11~~

~~CAPITAL ADJUSTMENTS~~

In the event that the Committee determines that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of Common Stock or other securities of the Company, issuance of warrants or other

~~A-12~~

rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the Common Stock such that an adjustment is determined by the Committee to be appropriate to prevent the dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of the (i) the number of shares and type of Common Stock (or the securities or property) which thereafter may be made the subject of Awards, (ii) the number of shares and type of Common Stock (or other securities or property) subject to outstanding Awards, (iii) the Option Price of each outstanding Award, and (iv) the amount, if any, the Company pays for forfeited shares of Common Stock in accordance with ~~Section 6.4~~; provided however, that the number of shares of Common Stock (or other securities or property) subject to any Award shall always be a whole number. In lieu of the foregoing, if deemed appropriate, the Committee may make provision for a cash payment to the holder of an outstanding Award. Notwithstanding the foregoing, no such adjustment or cash payment shall be made or authorized to the extent that such adjustment or cash payment would cause the Plan or any Stock Option to violate Section 422 of the Code. Such adjustments shall be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Company is subject.

Upon the occurrence of any such adjustment or cash payment, the Company shall provide notice to each affected Participant of its computation of such adjustment or cash payment which shall be conclusive and shall be binding upon each such Participant.

~~ARTICLE 12~~

~~RECAPITALIZATION, MERGER, AND CONSOLIDATION~~

~~12.1 No Effect on Company’s Authority.~~ The existence of this Plan and Awards granted hereunder shall not affect in any way the right or power of the Company or its shareholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure and its business, or any Change in Control, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the Common Stock or the rights thereof (or any rights, options, or warrants to purchase same), or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

~~12.2 Conversion of Awards Where Company Survives.~~ ~~Subject to any required action by the shareholders and except as otherwise provided by~~ ~~Section 12.4~~ hereof or as may be required to comply with Section 409A of the Code and the regulations or other guidance issued thereunder, if the Company is the surviving or resulting corporation in any merger, consolidation, or share exchange, any Award granted hereunder shall pertain to and apply to the securities or rights (including cash, property, or assets) to which a holder of the number of shares of Common Stock subject to the Award would have been entitled.

~~12.3 Exchange or Cancellation of Awards Where Company Does Not Survive.~~ ~~Except as otherwise provided by~~ ~~Section 12.4~~ hereof or as may be required to comply with Section 409A of the Code and the regulations or other guidance issued thereunder, in the event of any merger, consolidation, or share exchange pursuant to which the Company is not the surviving or resulting corporation, there shall be substituted for each share of Common Stock subject to the unexercised portions of outstanding Awards, that number of shares of each class of stock or other securities or that amount of cash, property, or assets of the surviving, resulting, or consolidated company which were distributed or distributable to the shareholders of the Company in respect to each share of Common Stock held by them, such outstanding Awards to be thereafter exercisable for such stock, securities, cash, or property in accordance with their terms.

~~12.4 Cancellation of Awards.~~ ~~Notwithstanding the provisions of~~ ~~Sections 12.2 and 12.3~~ ~~hereof, and except as may be required to comply with Section 409A of the Code and the regulations or other guidance~~

~~A-13~~

issued thereunder, all Awards granted hereunder may be canceled by the Company, in its sole discretion, as of the effective date of any Change in Control, merger, consolidation, or share exchange, or any issuance of bonds, debentures, preferred or preference stocks ranking prior to or otherwise affecting the Common Stock or the rights thereof (or any rights, options, or warrants to purchase same), or of any proposed sale of all or substantially all of the assets of the Company, or of any dissolution or liquidation of the Company, by either:

(a) giving notice to each holder thereof or his or her personal representative of its intention to cancel those Awards for which the issuance of shares of Common Stock involved payment by the Participant for such shares and, permitting the purchase during the thirty (30) day period next preceding such effective date of any or all of the shares of Common Stock subject to such outstanding Awards, including in the Board’s discretion some or all of the shares as to which such Awards would not otherwise be vested and exercisable; or

(b) in the case of Awards that are either (i) settled only in shares of Common Stock, or (ii) at the election of the Participant, settled in shares of Common Stock, paying the holder thereof an amount equal to a reasonable estimate of the difference between the net amount per share payable in such transaction or as a result of such transaction, and the price per share of such Award to be paid by the Participant (hereinafter the “~~Spread~~”), multiplied by the number of shares subject to the Award. In cases where the shares constitute, or would after exercise constitute, Restricted Stock, the Company, in its discretion may include some or all of those shares in the calculation of the amount payable hereunder. In estimating the Spread, appropriate adjustments to give effect to the existence of the Awards shall be made, such as deeming the Awards to have been exercised, with the Company receiving the exercise price payable thereunder, and treating the shares receivable upon exercise of the Awards as being outstanding in determining the net amount per share. In cases where the proposed transaction consists of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net amount receivable with respect to shares of Common Stock upon a distribution and liquidation by the Company after giving effect to expenses and charges (including but not limited to taxes payable by the Company before such liquidation could be completed).

~~(c) An Award that by its terms would be fully vested or exercisable upon a Change in Control will be considered vested or exercisable for purposes of~~ ~~Section 12.4(a)~~ ~~hereof.~~

~~ARTICLE 13~~

~~LIQUIDATION OR DISSOLUTION~~

~~Subject to~~ ~~Section 12.4~~ hereof, in case the Company shall, at any time while any Award under this Plan shall be in force and remain unexpired, (i) sell all or substantially all of its property, or (ii) dissolve, liquidate, or wind up its affairs, then each Participant shall be entitled to receive, in lieu of each share of Common Stock of the Company which such Participant would have been entitled to receive under the Award, the same kind and amount of any securities or assets as may be issuable, distributable, or payable upon any such sale, dissolution, liquidation, or winding up with respect to each share of Common Stock of the Company. If the Company shall, at any time prior to the expiration of any Award, make any partial distribution of its assets, in the nature of a partial liquidation, whether payable in cash or in kind (but excluding the distribution of a cash dividend payable out of earned surplus and designated as such), and an adjustment is determined by the Committee to be appropriate to prevent the dilution of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, make such adjustment in accordance with the provisions of ~~Article 11~~ ~~hereof.~~

~~A-14~~

~~ARTICLE 14~~

~~AWARDS IN SUBSTITUTION FOR~~

~~AWARDS~~ ~~GRANTED BY OTHER ENTITIES~~

Awards may be granted under the Plan from time to time in substitution for similar instruments held by employees, consultants or directors of a corporation, partnership, or limited liability company who become or are about to become Employees, Consultants or Outside Directors of the Company or any Subsidiary as a result of a merger or consolidation of the employing corporation with the Company, the acquisition by the Company of equity of the employing entity, or any other similar transaction pursuant to which the Company becomes the successor employer. The terms and conditions of the substitute Awards so granted may vary from the terms and conditions set forth in this Plan to such extent as the Committee at the time of grant may deem appropriate to conform, in whole or in part, to the provisions of the Awards in substitution for which they are granted.

~~ARTICLE 15~~

~~MISCELLANEOUS PROVISIONS~~

~~15.1~~~~Investment Intent.~~ The Company may require that there be presented to and filed with it by any Participant under the Plan, such evidence as it may deem necessary to establish that the Awards granted or the shares of Common Stock to be purchased or transferred are being acquired for investment and not with a view to their distribution.

~~15.2~~~~No Right to Continued Employment.~~ ~~Neither the Plan nor any Award granted under the Plan shall confer upon any Participant any right with respect to continuance of employment by the Company or any Subsidiary.~~

~~15.3~~~~Indemnification of Board and Committee.~~ No member of the Board or the Committee, nor any officer or Employee of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board and the Committee, each officer of the Company, and each Employee of the Company acting on behalf of the Board or the Committee shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination, or interpretation.

~~15.4 Effect of the Plan.~~ Neither the adoption of this Plan nor any action of the Board or the Committee shall be deemed to give any person any right to be granted an Award or any other rights except as may be evidenced by an Award Agreement, or any amendment thereto, duly authorized by the Committee and executed on behalf of the Company, and then only to the extent and upon the terms and conditions expressly set forth therein.

~~15.5~~~~Compliance With Other Laws and Regulations.~~ Notwithstanding anything contained herein to the contrary, the Company shall not be required to sell or issue shares of Common Stock under any Award if the issuance thereof would constitute a violation by the Participant or the Company of any provisions of any law or regulation of any governmental authority or any national securities exchange or inter-dealer quotation system or other forum in which shares of Common Stock are quoted or traded (including without limitation Section 16 of the 1934 Act and Section 162(m) of the Code); and, as a condition of any sale or issuance of shares of Common Stock under an Award, the Committee may require such agreements or undertakings, if any, as the Committee may deem necessary or advisable to assure compliance with any such law or regulation. The Plan, the grant and exercise of Awards hereunder, and the obligation of the Company to sell and deliver shares of Common Stock, shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required.

~~A-15~~

~~15.6~~~~Tax Requirements.~~ ~~The Company or, if applicable, any Subsidiary (for purposes of this~~ ~~Section 15.6, the term “~~~~Company~~” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan, any Federal, state, local, or other taxes required by law to be withheld in connection with an Award granted under this Plan. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to the Award. Such payments shall be required to be made when requested by Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made (i) by the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding obligations of the Company; (ii) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (iii) below) the required tax withholding payment; (iii) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (iv) any combination of (i), (ii), or (iii). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant. The Committee may in the Award Agreement impose any additional tax requirements or provisions that the Committee deems necessary or desirable.

~~15.7 Assignability~~. Incentive Stock Options may not be transferred, assigned, pledged, hypothecated, or otherwise conveyed or encumbered other than by will or the laws of descent and distribution and may be exercised during the lifetime of the Participant only by the Participant or the Participant’s legally authorized representative, and each Award Agreement in respect of an Incentive Stock Option shall so provide. The designation by a Participant of a beneficiary will not constitute a transfer of a Stock Option. The Committee may waive or modify any limitation contained in the preceding sentences of this ~~Section 15.7~~ ~~that is not required for compliance with Section 422 of the Code.~~

Except as otherwise provided herein, Nonqualified Stock Options may not be transferred, assigned, pledged, hypothecated, or otherwise conveyed or encumbered other than by will or the laws of descent and distribution. The Committee may, in its discretion, authorize all or a portion of a Nonqualified Stock Option to be granted to a Participant on terms which permit transfer by such Participant to (i) the spouse (or former spouse), children, or grandchildren of the Participant (“~~Immediate Family Members~~”), (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members, (iii) a partnership in which the only partners are (1) such Immediate Family Members and/or (2) entities which are controlled by Immediate Family Members, (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision, or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, ~~provided that~~ (x) there shall be no consideration for any such transfer, (y) the Award Agreement pursuant to which such Nonqualified Stock Option is granted must be approved by the Committee and must expressly provide for transferability in a manner consistent with this Section, and (z) subsequent transfers of transferred Nonqualified Stock Options shall be prohibited except those by will or the laws of descent and distribution.

~~Following any transfer, any such Nonqualified Stock Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of~~ ~~Articles 8, 9, 11, 13 and 15~~ hereof the term “Participant” shall be deemed to include the transferee. The events of Termination of Service shall continue to be applied with respect to the original Participant, following which the Nonqualified Stock Options shall be exercisable or convertible by the transferee only to the extent and for the periods specified in the Award Agreement. The Committee and the Company shall have no obligation to

~~A-16~~

inform any transferee of a Nonqualified Stock Option of any expiration, termination, lapse, or acceleration of such Stock Option. The Company shall have no obligation to register with any federal or state securities commission or agency any Common Stock issuable or issued under a Nonqualified Stock Option that has been transferred by a Participant under this ~~Section 15.7~~.

~~15.8 Use of Proceeds.~~ ~~Proceeds from the sale of shares of Common Stock pursuant to Awards granted under this Plan shall constitute general funds of the Company.~~

~~15.9 Execution of Receipts and Releases.~~ Any payment of cash or any issuance or transfer of Common Stock to a Participant, or his or her legal representative, heir, legatee, or distributee, shall, to the extent thereof, be in full satisfaction of all claims of such persons hereunder. The Committee may require any Participant, legal representative, heir, legatee, or distributee, as a condition precedent to such payment, issuance, or transfer, to execute a release and receipt therfor in such form as the Committee may determine, in its sole discretion.

~~15.10 Legend.~~ Each certificate representing shares of Restricted Stock issued to a Participant shall bear the following legend, or a similar legend deemed by the Company to constitute an appropriate notice of the provisions hereof (any such certificate not having such legend shall be surrendered upon demand by the Company and so endorsed):

~~On the face of the certificate:~~

~~“Transfer of this stock is restricted in accordance with conditions printed on the reverse of this certificate.”~~

~~On the reverse:~~

“The shares of stock evidenced by this certificate are subject to, and transferable only in accordance with, that certain 2008 Stock Awards Plan of Chase Packaging Corporation, a copy of which is on file at the principal office of the Company in Fair Haven, New Jersey. No transfer or pledge of the shares evidenced hereby may be made except in accordance with and subject to the provisions of said Plan. By acceptance of this certificate, any holder, transferee, or pledgee hereof agrees to be bound by all of the provisions of said Plan.”

The following legend shall be inserted on a certificate evidencing Common Stock issued under the Plan if the shares were not issued in a transaction registered under the applicable federal and state securities laws:

“Shares of stock represented by this certificate have been acquired by the holder for investment and not for resale, transfer, or distribution, have been issued pursuant to exemptions from the registration requirements of applicable state and federal securities laws, and may not be offered for sale, sold, or transferred other than pursuant to effective registration under such laws, or in transactions otherwise in compliance with such laws, and upon evidence satisfactory to the Company of compliance with such laws, as to which the Company may rely upon an opinion of counsel satisfactory to the Company.”

~~A-17~~

~~ANNUAL MEETING OF SHAREHOLDERS OF~~

~~CHASE PACKAGING CORPORATION~~

~~June 3, 2008~~

~~PROXY VOTING INSTRUCTIONS~~

~~MAIL~~ ~~- -~~ ~~Date,~~/www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=08614 Please sign, date and mail your proxy card ~~in the envelope provided as soon as possible.~~

~~-OR-~~

~~TELEPHONE~~ ~~- -~~ ~~Call toll-free~~ ~~1-800-PROXIES~~ ~~(1-800-776-9437) in the United States or~~ ~~1-718-921-8500~~ ~~from foreign countries and follow the instructions. Have your proxy card available when you call.~~

~~-OR-~~

~~INTERNET~~ ~~- -~~ ~~Access “~~~~www.voteproxy.com~~~~” and follow the on-screen instructions. Have your proxy card available when you access the web page.~~

~~-OR-~~

~~IN PERSON~~ - ~~You may vote your shares in person by attending the Annual Meeting.~~

~~COMPANY NUMBER~~

~~ACCOUNT NUMBER~~

~~You may enter your voting instructions at 1-800-PROXIES in the United States or 1-718-921-8500 from~~ ~~foreign countries or www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or meeting date.~~

~~Please detach along perforated line and mail in the envelope provided~~ IF ~~you are not voting via telephone or the Internet.~~

~~20430303000000000000 6~~

~~060308~~

~~THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSALS 2, 3 AND 4.~~

~~PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE~~ x

~~1. ELECTION OF DIRECTORS OF THE COMPANY~~

		~~NOMINEES:~~
o	~~FOR ALL NOMINEES~~	o ~~Allen T. McInnes~~
		o ~~William J. Barrett~~
o	~~WITHHOLD AUTHORITY~~	o ~~Herbert M. Gardner~~
	~~FOR ALL NOMINEES~~	o ~~Edward L. Flynn~~

o	~~FOR ALL EXCEPT~~
	~~(See instructions below)~~

~~INSTRUCTIONS:~~

~~To withhold authority to vote for any individual nominee(s), mark~~ ~~“FOR ALL EXCEPT”~~ ~~and fill~~ in the ~~circle next to each nominee you wish to withhold,~~envelope provided as ~~shown here:~~ x

		~~FOR~~	~~AGAINST~~	~~ABSTAIN~~
2.	~~APPROVAL OF INCREASE IN THE NUMBER OF AUTHORIZED SHARES~~	o	o	o

3.	~~APPROVAL OF THE COMPANY’S 2008 STOCK AWARDS PLAN~~	o	o	o

4.	~~RATIFICATION OF SELECTION OF LAZAR LEVINE & FELIX LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~	o	o	o

Returned proxy forms when properly executed will be voted: (1) as specified on the matters listed above; (2) in accordance with the Directors’ recommendations where a choice is not specified; and (3) in accordance with the judgment of the proxies on any other matters that may properly come before the meeting.

~~PLEASE COMPLETE, SIGN, DATE AND RETURN THE CARD PROMPTLY.~~

~~To change the address on your account, please check the box at right and~~ ~~indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.~~ o

soon as possible. Signature of Shareholder

Date:

Signature of Shareholder

Date:

Note:

Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. 1. ELECTION OF DIRECTORS OF THE COMPANY NOMINEES: Allen T. McInnes William J. Barrett Herbert M. Gardner Edward L. Flynn 2. RATIFICATION OF SELECTION OF PARENTE RANDOLPH, LLC AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Returned proxy forms when properly executed will be voted: (1) as specified on the matters listed above; (2) in accordance with the Directors' recommendations where a choice is not specified; and (3) in accordance with the judgment of the proxies on any other matters that may properly come before the meeting. PLEASE COMPLETE, SIGN, DATE AND RETURN THE CARD PROMPTLY. FOR AGAINST ABSTAIN FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x Please detach along perforated line and mail in the envelope provided. --------------- ---------------- 20430000000000000000 8 060209

·Signature of Shareholder Date: Signature of Shareholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. 1. ELECTION OF DIRECTORS OF THE COMPANY Allen T. McInnes William J. Barrett Herbert M. Gardner Edward L. Flynn 2. RATIFICATION OF SELECTION OF PARENTE RANDOLPH, LLC AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Returned proxy forms when properly executed will be voted: (1) as specified on the matters listed above; (2) in accordance with the Directors' recommendations where a choice is not specified; and (3) in accordance with the judgment of the proxies on any other matters that may properly come before the meeting. PLEASE COMPLETE, SIGN, DATE AND RETURN THE CARD PROMPTLY. FOR AGAINST ABSTAIN FOR ALL NOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES FOR ALL EXCEPT (See instructions below) INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: NOMINEES: ANNUAL MEETING OF SHAREHOLDERS OF CHASE PACKAGING CORPORATION June 2, 2009 INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions. Have your proxy card available when you access the web page, and use the Company Number and Account Number shown on your proxy card. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call and use the Company Number and Account Number shown on your proxy card. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON - You may vote your shares in person by attending the Annual Meeting. PROXY VOTING INSTRUCTIONS Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF DIRECTORS AND “FOR” PROPOSAL 2. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x --------------- ---------------- 20430000000000000000 8 060209 COMPANY NUMBER ACCOUNT NUMBER NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The notice of meeting, proxy statement and proxy card are available at http://www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=08614

	1. ELECTION OF DIRECTORS OF THE COMPANY Allen T. McInnes William J. Barrett Herbert M. Gardner Edward L. Flynn 2. RATIFICATION OF SELECTION OF PARENTE RANDOLPH, LLC AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM NOMINEES: Important Notice of Availability of Proxy Materials for the Shareholder Meeting of CHASE PACKAGING CORPORATION To Be Held On: June 2, 2009 at 2:00 P.M. University Club, 1 West 54th Street, New York, New York This communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materials before voting. If you want to receive a paper or e-mail copy of the proxy materials you must request one. There is no charge to you for requesting a copy. To facilitate timely delivery please make the request as instructed below before May 25, 2009. Please visit http://www.amstock.com/proxyservices/viewmaterial.asp?CoNumber=08614, where the following materials are available for view: • Notice of Annual Meeting of ~~Shareholders~~
	·Stockholders • Proxy Statement
	· • Form of Electronic Proxy Card
	· • Annual Report on Form ~~10-KSB~~

10-K TO REQUEST MATERIAL:	TELEPHONE: ~~866-668-8562~~
	888-Proxy-NA (888-776-9962) 718-921-8562 (for international callers) E-MAIL: info@amstock.com
	WEBSITE: http://www.amstock.com/~~ProxyServices/RequestMaterials.asp~~

proxyservices/requestmaterials.asp TO VOTE:	ONLINE: To access your online proxy card, please visit www.voteproxy.com and follow the on-screen instructions. You may enter your voting instructions at www.voteproxy.com up until 11:59 PM Eastern Time the day before the cut-off or meeting date.

	~~-OR-~~

	IN PERSON: You may vote your shares in person by attending the Annual Meeting.

	~~-OR-~~

	TELEPHONE: To vote by telephone, please visit ~~http:~~https://~~www.amstock.com/ProxyServices/ViewMaterials.asp~~ secure.amstock.com/voteproxy/login2.asp to view the materials and to obtain the toll free number to call.

	~~-OR-~~

	MAIL: You may request a card by following the instructions above. - OR - COMPANY NUMBER ACCOUNT NUMBER CONTROL NUMBER - OR - Please note that you cannot use this notice to vote by mail. - OR -

~~1. ELECTION OF DIRECTORS OF THE COMPANY~~

~~NOMINEES:~~	~~Allen T. McInnes~~
	~~William J. Barrett~~
	~~Herbert M. Gardner~~
	~~Edward L. Flynn~~

~~2. APPROVAL OF INCREASE IN THE NUMBER OF AUTHORIZED SHARES~~

~~3. APPROVAL OF THE COMPANY’S 2008 STOCK AWARDS PLAN~~

~~4. RATIFICATION OF SELECTION OF LAZAR LEVINE & FELIX LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~

~~Please note that you cannot use this notice to vote by mail.~~

	ANNUAL MEETING OF SHAREHOLDERS OF CHASE PACKAGING CORPORATION


	~~By:~~	~~/s/ Allen T. McInnes~~
		~~Allen T. McInnes, Chairman~~ June 2, 2009 NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The notice of ~~the Board,~~
		~~President,~~meeting, proxy statement and ~~Treasurer~~



proxy card are available at http:/~~s/ William J. Barrett~~
	~~William J. Barrett, Secretary~~