STEELCLOUD, INC. AMENDED 2007 STOCK OPTION AND RESTRICTED STOCK PLAN

The SteelCloud, Inc. Amended 2007 Stock Option and Restricted Stock Plan (hereinafter, the “ Plan ”) is hereby established to grant to officers and other employees of the Company or of its parents or subsidiaries (as defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended (the “ Code ”)), if any (individually and collectively, the Company”), and to non-employee directors, consultants and advisors and other persons who may perform significant services for or on behalf of the Company, to create a stock based incentive for such persons to remain in the employ of or provide services to the Company and to contribute to its success.

The Company may grant under the Plan incentive stock options within the meaning of Section 422 of the Code (“ Incentive Stock Options ”), stock options that do not qualify for treatment as Incentive Stock Options (“ Nonstatutory Options ” and together with the Incentive Stock Options, the “ Options ”), and shares of restricted stock (the “ Restricted Stock ” and together with the Incentive Stock Options and the Nonstatutory Options, the “ Stock ”).  All grants hereunder are of, or are underlined by, the Company’s common stock, $0.001 par value.

The Plan shall be administered by the Board of Directors of the Company (the “Board”), if each member is a “Non-Employee Director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (“Rule 16b-3”), or a committee (the “Committee”) of two or more directors, each of whom is a Non-Employee Director.  Appointment of Committee members shall be effective upon acceptance of appointment.  Committee members may resign at any time by delivering written notice to the Board.  Vacancies in the Committee may be filled by the Board.  Until such time that the Committee is properly appointed, the Board shall administer the Plan in accordance with the terms of this Section 1.2.

A majority of the members of the Committee shall constitute a quorum for the purposes of the Plan.  Provided a quorum is present, the Committee may take action by affirmative vote or consent of a majority of its members present at a meeting.  Meetings may be held telephonically as long as all members are able to hear one another, and a member of the Committee shall be deemed to be present for this purpose if he or she is in simultaneous communication by telephone with the other members who are able to hear one another.  In lieu of action at a meeting, the Committee may act by written consent of a majority of its members.

Subject to the express provisions of the Plan, the Committee shall have the authority to construe and interpret the Plan and all Grant Agreements (as defined in Section 4.4) entered into pursuant hereto and to define the terms used therein, to prescribe, adopt, amend and rescind rules and regulations relating to the administration of the Plan and to make all other determinations necessary or advisable for the administration of the Plan; provided, however, that the Committee may delegate nondiscretionary administrative duties to such employees of the Company as it deems proper; and, provided, further, in its absolute discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan.  Subject to the express limitations of the Plan, the Committee shall designate the individuals from among the class of persons eligible to participate as provided in Section 1.3 who shall receive Stock, whether a grantee will receive Incentive Stock Options, Nonstatutory Options, or Restricted Stock or any combination thereof, and the amount, price, restrictions and all other terms and provisions of such Stock (which need not be identical).

Members of the Committee shall receive such compensation for their services as members as may be determined by the Board.  All expenses and liabilities which members of the Committee incur in connection with the administration of this Plan shall be borne by the Company.  The Committee may, with the approval of the Board, employ attorneys, consultants, accountants, appraisers, brokers or other persons.  The Committee, the Company and the Company’s officers and directors shall be entitled to rely upon the advice, opinions or valuations of any such persons.  No members of the Committee or Board shall be personally liable for any action, determination or interpretation made in good faith with respect to the Plan, and all members of the Committee shall be fully protected by the Company in respect of any such action, determination or interpretation.

Officers and other employees of the Company, non-employee directors, consultants and advisors and other persons who may perform significant services on behalf of the Company shall be eligible for selection to participate in the Plan upon approval by the Committee; provided, however, that only “employees” (within the meaning of Section 3401(c) of the Code) of the Company shall be eligible for the grant of Incentive Stock Options.  An individual who has been granted Stock may, if otherwise eligible, be granted additional Stock if the Committee shall so determine.  No person is eligible to participate in the Plan by matter of right; only those eligible persons who are selected by the Committee in its discretion shall participate in the Plan.

Subject to adjustment as provided in Section 4.5, the shares of common stock to be offered under the Plan shall be shares of authorized but unissued common stock, including any shares repurchased under the terms of the Plan or any Grant Agreement entered into pursuant hereto.  The cumulative aggregate number of shares of common stock to be issued under the Plan shall not exceed 1,500,000, subject to adjustment as set forth in Section 4.5.

If any Option granted hereunder shall expire or terminate for any reason without having been fully exercised, the unpurchased shares subject thereto shall again be available for the purposes of the Plan.  For purposes of this Section 1.4, where the exercise price of Options is paid by means of the grantee’s surrender of previously owned shares of common stock, only the net number of additional shares issued and which remain outstanding in connection with such exercise shall be deemed “issued” for purposes of the Plan.

(a)           The exercise price of each Incentive Stock Option granted under the Plan shall be determined by the Committee, but shall not be less than 100% of the “Fair Market Value” (as defined below) of common stock on the date of grant.  If an Incentive Stock Option is granted to an employee who at the time such Incentive Stock Option is granted owns (within the meaning of section 424(d) of the Code) more than 10% of the total combined voting power of all classes of capital stock of the Company, the Option exercise price shall be at least 110% of the Fair Market Value of common stock on the date of grant.  The exercise price of each Nonstatutory Option also shall be determined by the Committee, but shall not be less than 85% of the Fair Market Value of the common stock on the date of grant.  The status of each Option granted under the Plan as either an Incentive Stock Option or a Nonstatutory Option shall be determined by the Committee at the time the Committee acts to grant the Option, and shall be clearly identified as such in the Grant Agreement relating thereto.

“ Fair Market Value ” for purposes of the Plan shall mean: (i) the closing price of a share of common stock on the principal exchange on which shares of common stock are then trading, if any, on the day immediately preceding the date of grant, or, if shares were not traded on the day preceding such date of grant, then on the next preceding trading day during which a sale occurred; or (ii) if common stock is not traded on an exchange but is quoted on NASDAQ or a successor quotation system, (1) the last sales price (if common stock is then listed on the NASDAQ Stock Market) or (2) the mean between the closing representative bid and asked price (in all other cases) for common stock on the day prior to the date of grant as reported by NASDAQ or such successor quotation system; or (iii) if there is no listing or trading of common stock either on a national exchange or over-the-counter, that price determined in good faith by the Committee to be the fair value per share of common stock, based upon such evidence as it deems necessary or advisable.

(b)           In the discretion of the Committee at the time the Option is exercised, the exercise price of any Option granted under the Plan shall be paid in full in cash, by check or by the optionee’s interest-bearing promissory note (subject to any limitations of applicable state corporations law) delivered at the time of exercise; provided, however, that subject to the timing requirements of Section 2.7, in the discretion of the Committee and upon receipt of all regulatory approvals, the person exercising the Option may deliver as payment in whole or in part of such exercise price certificates for common stock (duly endorsed or with duly executed stock powers attached), which shall be valued at its Fair Market Value on the day of exercise of the Option, or other property deemed appropriate by the Committee; and, provided further, that, subject to Section 422 of the Code, so-called cashless exercises as permitted under applicable rules and regulations of the Securities and Exchange Commission and the Federal Reserve Board shall be permitted in the discretion of the Committee.  Without limiting the Committee’s discretion in this regard, consecutive book entry stock-for-stock exercises of Options (or “pyramiding”) also are permitted in the Committee’s discretion.

Irrespective of the form of payment, the delivery of shares issuable upon the exercise of an Option shall be conditioned upon payment by the optionee to the Company of amounts sufficient to enable the Company to pay all federal, state, and local withholding taxes resulting, in the Company’s judgment, from the exercise.  In the discretion of the Committee, such payment to the Company may be effected through (i) the Company’s withholding from the number of shares of common stock that would otherwise be delivered to the optionee by the Company on exercise of the Option a number of shares of common stock equal in value (as determined by the Fair Market Value of common stock on the date of exercise) to the aggregate withholding taxes, (ii) payment by the optionee to the Company of the aggregate withholding taxes in cash, (iii) withholding by the Company from other amounts contemporaneously owed by the Company to the optionee, or (iv) any combination of these three methods, as determined by the Committee in its discretion.

(a)           The Committee shall provide, in the terms of each Grant Agreement, when the Option subject to such agreement expires and becomes unexercisable, but in no event will an Incentive Stock Option granted under the Plan be exercisable after the expiration of ten years from the date it is granted.  Without limiting the generality of the foregoing, the Committee may provide in the Grant Agreement that the Option subject thereto expires 30 days following a Termination of Employment (as defined in Section 4.3 hereof) for any reason other than death or disability, or six months following a Termination of Employment for disability or following an optionee’s death.

(b)           Outside Date for Exercise.  Notwithstanding any provision of this Section 2.2, in no event shall any Option granted under the Plan be exercised after the expiration date of such Option set forth in the applicable Grant Agreement.

Each Option granted under the Plan shall become exercisable and the total number of shares subject thereto shall be purchasable, in a lump sum or in such installments, which need not be equal, as the Committee shall determine; provided, however, that each Option shall become exercisable in full no later than ten years after such Option is granted, and each Option shall become exercisable as to at least 10% of the shares of common stock covered thereby on each anniversary of the date such Option is granted; and provided, further, that if the holder of an Option shall not in any given installment period purchase all of the shares which such holder is entitled to purchase in such installment period, such holder’s right to purchase any shares not purchased in such installment period shall continue until the expiration or sooner termination of such holder’s Option.  The Committee may, at any time after grant of the Option and from time to time, increase the number of shares purchasable in any installment, subject to the total number of shares subject to the Option and the limitations set forth in Section 2.5.  At any time and from time to time prior to the time when any exercisable Option or exercisable portion thereof becomes unexercisable under the Plan or the applicable Grant Agreement, such Option or portion thereof may be exercised in whole or in part; provided, however, that the Committee may, by the terms of the Option, require any partial exercise to be with respect to a specified minimum number of shares.  No Option or installment thereof shall be exercisable except with respect to whole shares.  Fractional share interests shall be disregarded, except that they may be accumulated as provided above and except that if such a fractional share interest constitutes the total shares of common stock remaining available for purchase under an Option at the time of exercise, the optionee shall be entitled to receive on exercise a certified or bank cashier’s check in an amount equal to the Fair Market Value of such fractional share of stock.

Except as the Committee may determine as aforesaid, an Option granted under the Plan shall, by its terms, be nontransferable by the optionee other than by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order (as defined by the Code), and shall be exercisable during the optionee’s lifetime only by the optionee or by his or her guardian or legal representative.  More particularly, but without limiting the generality of the immediately preceding sentence, an Option may not be assigned, transferred (except as provided in the preceding sentence), pledged or hypothecated (whether by operation of law or otherwise), and shall not be subject to execution, attachment or similar process.  Any attempted assignment, transfer, pledge, hypothecation or other disposition of any Option contrary to the provisions of the Plan and the applicable Grant Agreement, and any levy of any attachment or similar