CROSSPOINT ENERGY COMPANY

2006 EQUITY INCENTIVE PLAN

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TABLE OF CONTENTS

Page
 
SECTION 1.
PURPOSE.
1
     
SECTION 2.
DEFINITIONS.
1
     
SECTION 3.
ADMINISTRATION.
6
     
SECTION 4.
COMMON STOCK SUBJECT TO THE PLAN.
7
     
SECTION 5.
ELIGIBILITY TO RECEIVE AWARDS.
7
     
SECTION 6.
STOCK OPTIONS.
8
     
SECTION 7.
STOCK APPRECIATION RIGHTS.
11
     
SECTION 8.
RESTRICTED STOCK AWARDS.
12
     
SECTION 9.
STOCK BONUS AWARDS.
14
     
SECTION 10.
OTHER STOCK-BASED AWARDS.
14
     
SECTION 11.
CANCELLATION OR RESCISSION OF AWARDS.
15
     
SECTION 12.
LOANS.
16
     
SECTION 13.
SECURITIES LAW REQUIREMENTS.
16
     
SECTION 14.
RESTRICTIONS ON TRANSFER; REPRESENTATIONS OF PARTICIPANT; LEGENDS.
17
     
SECTION 15.
SINGLE OR MULTIPLE AGREEMENTS.
17
     
SECTION 16.
RIGHTS OF A STOCKHOLDER.
17
     
SECTION 17.
NO RIGHT TO CONTINUE EMPLOYMENT OR SERVICE.
17
     
SECTION 18.
WITHHOLDING.
18
     
SECTION 19.
INDEMNIFICATION.
18
     
SECTION 20.
NON-ASSIGNABILITY.
18
     
SECTION 21.
NONUNIFORM DETERMINATIONS.
19

 
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TABLE OF CONTENTS
(continued)
Page

     
SECTION 22.
ADJUSTMENTS.
19
     
SECTION 23.
TERMINATION AND AMENDMENT.
19
     
SECTION 24.
SEVERABILITY.
19
     
SECTION 25.
EFFECT ON OTHER PLANS.
20
     
SECTION 26.
EFFECTIVE DATE OF THE PLAN.
20
     
SECTION 27.
GOVERNING LAW.
20
     
SECTION 28.
GENDER AND NUMBER.
20
     
SECTION 29.
ACCELERATION OF EXERCISABILITY AND VESTING
20
     
SECTION 30.
MODIFICATION OF AWARDS
20
     
SECTION 31.
NO STRICT CONSTRUCTION
21
     
SECTION 32.
SUCCESSORS
21
     
SECTION 33.
PLAN PROVISIONS CONTROL
21
     
SECTION 34.
HEADINGS
21
     
SECTION 35.
CHANGE IN CONTROL
21
     
SECTION 36.
COMPLIANCE WITH SECTION 409A OF THE CODE
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CROSSPOINT ENERGY COMPANY
2006 EQUITY INCENTIVE PLAN
 
Section 1.  Purpose. The CrossPoint Energy Company 2006 Equity Incentive Plan
(the “Plan”) has been established by CrossPoint Energy Company, a Nevada
corporation (the “Company”), effective as of July 7, 2006 (the “Effective
Date”), to foster and promote the long-term financial success of the Company and
its Subsidiaries and thereby increase stockholder value. The Plan provides for
the Award (as defined in Section 3) of equity incentives to those employees,
directors, or officers of, or key advisers or consultants to, the Company or any
of its Subsidiaries who are responsible for or contribute to the management,
growth or success of the Company or any of its Subsidiaries.
 
Section 2.  Definitions. For purposes of this Plan, the following terms used
herein shall have the following meanings, unless a different meaning is clearly
required by the context.
 
2.1  “Board” means the Board of Directors of the Company.
 
2.2  “Change in Control” means the occurrence of any of the following:
 
(a)  the acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act)) (a “Person”) of “beneficial
ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 50% or more of either (i) the then-outstanding shares of common stock of the
Company, assuming conversion of any outstanding preferred stock (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that the following acquisitions shall not constitute a Change
in Control: (A) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (B) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or (C)
any acquisition by any corporation or other entity pursuant to a reorganization,
merger, consolidation or other business combination, if, following such
reorganization, merger, consolidation or other business combination, the
conditions described in (i), (ii) and (iii) of Section 2.2(c) are satisfied;
 
(b)  if individuals who, as of the date hereof, constitute the Board of the
Company (the “Incumbent Board”) cease for any reason to constitute at least
two-thirds of the Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a two-thirds vote of the
directors then constituting the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest subject to Regulation
14A promulgated under the Exchange Act or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;
 

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(c)  approval by the stockholders of the Company of a reorganization, merger,
consolidation or other business combination, unless following such
reorganization, merger, consolidation or other business combination (i) more
than 50% of, respectively, the then-outstanding shares of common stock or other
equity interests of the corporation or other entity resulting from such
reorganization, merger, consolidation or other business combination and the
combined voting power of the then-outstanding voting securities of such
corporation or other entity entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger,
consolidation or other business combination in substantially the same
proportions as their ownership, immediately prior to such reorganization,
merger, consolidation or other business combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be (for
purposes of determining whether such percentage test is satisfied, there shall
be excluded from the number of shares or other equity interests and voting
securities of the resulting corporation or other entity owned by the Company’s
stockholders, but not from the total number of outstanding shares or other
equity interests and voting securities of the resulting corporation or other
entity, any shares or voting securities received by any such stockholder in
respect of any consideration other than shares or other equity interests or
voting securities of the Company); (ii) no Person (excluding the Company, any
employee benefit plan (or related trust) of the Company, any qualified employee
benefit plan of such corporation or other entity resulting from such
reorganization, merger, consolidation or other business combination and any
Person beneficially owning, immediately prior to such reorganization, merger,
consolidation or other business combination, directly or indirectly, 50% or more
of the Outstanding Company Common Stock or Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or indirectly, 50%
or more of, respectively, the then-outstanding shares of common stock or other
equity interests of the corporation or other entity resulting from such
reorganization, merger, consolidation or other business combination or the
combined voting power of the then-outstanding voting securities of such
corporation entitled to vote generally in the election of directors; and (iii)
at least two-thirds of the members of the board of directors of the corporation
or other entity resulting from such reorganization, merger, consolidation or
other business combination were members of the Incumbent Board at the time of
the execution of the initial agreement providing for such reorganization,
merger, consolidation or other business combination; or
 
(d)  (i) approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company or (ii) the first to occur of (A) the sale or
other disposition (in one transaction or a series of related transactions) of
all or substantially all of the assets of the Company, or (B) the approval by
the stockholders of the Company of any such sale or disposition, other than, in
each case, any such sale or disposition to a corporation or other entity, with
respect to which immediately thereafter, (1) more than 50% of, respectively, the
then-outstanding shares of common stock or other equity interests of such
corporation or other entity and the combined voting power of the
then-outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities, as the case may be (for purposes of
determining whether such percentage test is satisfied, there shall be excluded
from the number of shares or other equity interests and voting securities of the
transferee corporation or other entity owned by the Company’s stockholders, but
not from the total number of outstanding shares and voting securities of the
transferee corporation or other entity, any shares or other equity interests or
voting securities received by any such stockholder in respect of any
consideration other than shares or voting securities of the Company), (2) no
Person (excluding the Company and any employee benefit plan (or related trust)
of the Company, any qualified employee benefit plan of such transferee
corporation or other entity and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 50% or more of
the Outstanding Company Common Stock or Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 50% or more of,
respectively, the then-outstanding shares of common stock or other equity
interests of such transferee corporation or other entity and the combined voting
power of the then-outstanding voting securities of such transferee corporation
or other entity entitled to vote generally in the election of directors and (3)
at least two-thirds of the members of the board of directors of such transferee
corporation or other entity were members of the Incumbent Board at the time of
the execution of the initial agreement or action of the board providing for such
sale or other disposition of assets of the Company.
 
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2.3  “Code” means the Internal Revenue Code of 1986, as amended.
 
2.4  “Committee” shall have the meaning provided in Section 3 of the Plan.
 
2.5  “Common Stock” means the common stock of the Company.
 
2.6  “Continuous Service” means that the Participant’s service with the Company,
any Parent Company or any Subsidiary, whether as an employee, officer, director,
adviser or consultant, is not interrupted or terminated. The Participant’s
Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which the Participant renders service to the Company,
any Parent Company or any Subsidiary as an employee, officer, consultant,
adviser or director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the
Participant’s Continuous Service. For example, a change in status from an
employee of the Company to a consultant of any Parent Company or a Subsidiary or
a director will not constitute an interruption of Continuous Service. The
Committee, in its sole discretion, may determine whether Continuous Service
shall be considered interrupted in the case of any leave of absence approved by
the Committee, including sick leave, military leave or any other personal leave.
 
2.7  “Disability” means (a) as it relates to the exercise of an Incentive Stock
Option after termination of employment, a disability within the meaning of
Section 22(e)(3) of the Code, and (b) for all other purposes, shall have the
meaning given that term by the group disability insurance, if any, maintained by
the Company for its employees or otherwise shall mean the complete inability of
the Participant, with or without a reasonable accommodation, to perform his or
her duties with the Company, any Parent Company or any Subsidiary on a full-time
basis as a result of physical or mental illness or personal injury he or she has
incurred, as determined by an independent physician selected with the approval
of the Company, any Parent Company or any Subsidiary and the Participant.
 
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2.8  “Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
2.9  “Fair Market Value” means, as determined by the Committee, (i) if the
Common Stock is listed on the Nasdaq Stock Market, the last sale price as quoted
on the Nasdaq Stock Market on the trading day immediately preceding the date for
which the determination is being made or, in the event that no such sale takes
place on such day, the average of the reported closing bid and asked prices on
such day, or, (ii) if the Common Stock is listed on a national securities
exchange, the last reported sale price on the principal national securities
exchange on which the Common Stock is listed or admitted to trading on the
trading day immediately preceding the date for which the determination is being
made or, if no such reported sale takes place on such day, the average of the
closing bid and asked prices on such day on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or,
(iii) if the Common Stock is not quoted on such Nasdaq Stock Market nor listed
or admitted to trading on a national securities exchange, then the average of
the closing bid and asked prices on the day immediately preceding the date for
which the determination is being made in the over-the-counter market as reported
by Nasdaq or, (iv) if bid and asked prices for the Common Stock on such day
shall not have been reported through Nasdaq, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member firm
regularly making a market in the Common Stock selected for such purpose by the
Board or a committee thereof, or, (v) if none of the foregoing is applicable,
then the fair market value of the Common Stock as determined in good faith by
the Committee in its sole discretion.
 
2.10  “Immediate Family” shall have the meaning provided in Section 19 of the
Plan.
 
2.11  “Incentive Stock Option” means a stock option granted under the Plan which
is intended to be designated as an “incentive stock option” within the meaning
of Section 422 of the Code.
 
2.12  “Non-Qualified Stock Option” means a stock option granted under the Plan
which is not intended to be an Incentive Stock Option, including any stock
option that provides (as of the time such option is granted) that it will not be
treated as an Incentive Stock Option nor as an option described in Section
423(b) of the Code.
 
2.13  “Other Stock-Based Award” means Awards (other than Stock Options, Stock
Appreciation Rights, Restricted Stock Awards, and Stock Bonus Awards)
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, shares of Common Stock and granted pursuant
to Section 10.
 
2.14  “Outside Director” means a member of the Board who is not employed by the
Company, any Parent Company or any Subsidiary.
 
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2.15  “Parent Company” means: (i) as it relates to Incentive Stock Options, any
corporation (other than the Company) in an unbroken chain of corporations ending
with the Company if, at the time of the granting of the Stock Option, each of
the corporations other than the Company owns stock possessing 50% or more of the
combined voting power of all classes of stock in one of the other corporations
in the chain; and (ii) for all other purposes, any corporation (other than the
Company) or other entity in an unbroken chain of corporations or other entities
ending with the Company if, at the time of the granting of the Stock Option or
other Award, each of the corporations or other entities other than the Company
owns stock possessing 50% or more of the combined voting power of all classes of
stock or other equity interests in one of the other corporations or other
entities in the chain.
 
2.16  “Participant” shall mean any employee, director or officer of, or key
adviser or consultant to, the Company or any Subsidiary to whom an Award is
granted under the Plan.
 
2.17  “Plan Year” means the twelve-month period beginning on January 1 and
ending on December 31; provided, however, the first Plan Year shall be the short
Plan Year beginning on the Effective Date and ending on December 31, 2006.
 
2.18  “Restricted Stock Award” means an Award of Common Stock made pursuant to
Section 8.
 
2.19  “Stock Appreciation Right” means an Award made pursuant to Section 7.
 
2.20  “Stock Bonus Award” means an Award made pursuant to Section 9.
 
2.21  “Stock Option” means any option to purchase Common Stock granted pursuant
to Section 6.
 
2.22  “Subsidiary” means: (i) as it relates to Incentive Stock Options, any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of the granting of the Stock Option,
each of the corporations (other than the last corporation in the unbroken chain)
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain; and (ii) for all
other purposes, a corporation or other entity of which not less than 50% of the
total voting power is held by the Company or by a Subsidiary, whether or not
such corporation or other entity now exists or is hereafter organized or
acquired by the Company or by a Subsidiary.
 
2.23  “Term of the Plan” means the period beginning on the Effective Date and
ending on the earlier to occur of (i) the date the Plan is terminated by the
Board in accordance with Section 22 and (ii) the day before the tenth
anniversary of the Effective Date.
 
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Section 3.  Administration. The Plan shall be administered by the Compensation
Committee of the Board or such other committee as may be appointed by the Board
from time to time for the purpose of administering this Plan, or if no such
committee is appointed or acting, the entire Board; provided, however, that so
long as the Company has any class of equity security registered pursuant to
Section 13 of the Exchange Act, and if the Plan is to be administered by a
committee, then such committee shall consist of two or more members of the
Board, each of whom shall each qualify as a “non-employee director” within the
meaning of Rule 16b-3 of the Exchange Act and, if applicable, as an “independent
director” under applicable national securities exchange or Nasdaq Stock Market
rules, and also qualify as an “outside director” within the meaning of Section
l62(m) of the Code and regulations pursuant thereto. For purposes of the Plan,
the Board acting in this capacity or the Compensation Committee described in the
preceding sentence shall be referred to as the “Committee.” The Committee shall
have the power and authority to grant to eligible persons pursuant to the terms
of the Plan: (1) Stock Options, (2) Stock Appreciation Rights, (3) Restricted
Stock Awards, (4) Stock Bonus Awards, (5) Other Stock-Based Awards, or (6) any
combination of the foregoing (collectively referred to as “Awards”).
 
The Committee shall have authority in its discretion to interpret the provisions
of the Plan and to decide all questions of fact arising in its application.
Except as otherwise expressly provided in the Plan, the Committee shall have
authority to select the persons to whom Awards shall be made under the Plan; to
determine whether and to what extent Awards shall be made under the Plan; to
determine the types of Award to be made and the amount, size, terms and
conditions of each such Award; to determine the time when the Awards shall be
granted; to determine whether, to what extent and under what circumstances
Common Stock and other amounts payable with respect to an Award under the Plan
shall be deferred either automatically or at the election of the Participant; to
adopt, alter and repeal such administrative rules, guidelines and practices
governing the Plan as it shall from time to time deem advisable; and to make all
other determinations necessary or advisable for the administration and
interpretation of the Plan. The Committee, in its sole discretion, may determine
that an Award will be immediately exercisable, in whole or in part, or that all
or any portion may not be exercised until a date, or dates, subsequent to its
date of grant, or until the occurrence of one or more specified events,
including the attainment of performance criteria, subject in any case to the
terms of the Plan. 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 Award may be exercised.
Notwithstanding anything in the Plan to the contrary, in the event that the
Committee determines that it is advisable to grant Awards which shall not
qualify for the exception for performance-based compensation from the tax
deductibility limitations of Section 162(m) of the Code, the Committee may make
such grants or Awards, or may amend the Plan to provide for such grants or
Awards, without satisfying the requirements of Section 162(m) of the Code.
 
Notwithstanding anything in the Plan to the contrary, the Committee also shall
have authority in its sole discretion to vary the terms of the Plan to the
extent necessary to comply with foreign, federal, state or local law or to meet
the objectives of the Plan. The Committee may, where appropriate, establish one
or more sub-plans for this purpose.
 
All decisions made by the Committee pursuant to the provisions of the Plan shall
be final and binding on all persons who participate in the Plan.
 
All expenses and liabilities incurred by the Committee in the administration and
interpretation of the Plan shall be borne by the Company. The Committee may
employ attorneys, consultants, accountants or other persons in connection with
the administration and interpretation of the Plan. The Company, and its officers
and directors, shall be entitled to rely upon the advice, opinions or valuations
of any such persons.
 
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Section 4.  Common Stock Subject to the Plan. 
 
4.1  Share Reserve. Subject to the following provisions of this Section 4 and to
such adjustment as may be made pursuant to Section 21, the maximum number of
shares available for issuance under the Plan shall be equal to 3,564,844 shares
of Common Stock. The maximum number of shares that may be issued upon the
exercise of Incentive Stock Options granted under the Plan shall not exceed the
limits under Code Section 422 (as adjusted pursuant to Section 21). During the
terms of the Awards under the Plan, the Company shall keep available at all
times the number of shares of Common Stock required to satisfy such Awards.
 
4.2  Source of Shares. Such shares may consist in whole or in part of authorized
and unissued shares or treasury shares or any combination thereof as the
Committee may determine. Except as otherwise provided herein, any shares subject
to an option or right granted or awarded under the Plan which for any reason
expires or is terminated unexercised, becomes unexercisable, or is forfeited or
otherwise terminated, surrendered or cancelled as to any shares, or if any
shares are not delivered because an Award under the Plan is settled in cash or
the shares are used to satisfy the applicable tax withholding obligation, such
shares shall not be deemed to have been delivered for purposes of determining
the maximum number of shares of Common Stock available for issuance under the
Plan and shall again become eligible for issuance under the Plan. If the
exercise price of any Stock Option granted under the Plan is satisfied by
tendering shares of Common Stock to the Company (whether by actual delivery or
by attestation and whether or not such surrendered shares were acquired pursuant
to any Award granted under the Plan), only the number of shares of Common Stock
issued net of the shares of Common Stock tendered shall be deemed delivered for
purposes of determining the maximum number of shares of Common Stock available
for issuance under the Plan. No Awards may be granted following the end of the
Term of the Plan.
 
Section 5.  Eligibility to Receive Awards. An Award may be granted to any
employee, director, or officer of, or key adviser or consultant to, the Company
or any Subsidiary, who is responsible for or contributes to the management,
growth or success of the Company or any Subsidiary, provided that bona fide
services shall be rendered by consultants or advisers to the Company or its
Subsidiaries and, unless otherwise approved by the Committee, such services must
not be in connection with the offer and sale of securities in a capital-raising
transaction and must not directly or indirectly promote or maintain a market for
the Company’s securities. Subject to the preceding sentence and Section 6.7, the
Committee shall have the sole authority to select the persons to whom an Award
is to be granted hereunder and to determine what type of Award is to be granted
to each such person. No person shall have any right to participate in the Plan.
Any person selected by the Committee for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period.
 
Section 6.  Stock Options. A Stock Option may be an Incentive Stock Option or a
Non-Qualified Stock Option. Only employees of the Company or a Subsidiary are
eligible to receive Incentive Stock Options. To the extent that any Stock Option
does not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option. Stock Options may be granted alone or in addition to
other Awards granted under the Plan. Except as otherwise expressly provided in
Section 6.7, the terms and conditions of each Stock Option granted under the
Plan shall be specified by the Committee, in its sole discretion, and shall be
set forth in a written Stock Option agreement between the Company and the
Participant in such form as the Committee shall approve from time to time or as
may be reasonably required in view of the terms and conditions approved by the
Committee from time to time. No person shall have any rights under any Stock
Option granted under the Plan unless and until the Company and the person to
whom such Stock Option shall have been granted shall have executed and delivered
an agreement expressly granting the Stock Option to such person and containing
provisions setting forth the terms and conditions of the Stock Option. The terms
and conditions of each Incentive Stock Option shall be such that each Incentive
Stock Option issued hereunder shall constitute and shall be treated as an
“incentive stock option” as defined in Section 422 of the Code. The terms and
conditions of each Non-Qualified Stock Option will be such that each
Non-Qualified Stock Option issued hereunder shall not constitute nor be treated
as an “incentive stock option” as defined in Section 422 of the Code or an
option described in Section 423(b) of the Code and will be a “non-qualified
stock option” for federal income tax purposes. The terms and conditions of any
Stock Option granted hereunder need not be identical to those of any other Stock
Option granted hereunder. The Stock Option agreements shall contain in substance
the following terms and conditions and may contain such additional terms and
conditions, not inconsistent with the terms of the Plan, as the Committee shall
deem desirable.
 
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6.1  Type of Option. Each Stock Option agreement shall identify the Stock Option
represented thereby as an Incentive Stock Option or a Non-Qualified Stock
Option, as the case may be.
 
6.2  Option Price. The Incentive Stock Option exercise price shall be fixed by
the Committee but shall in no event be less than 100% (or 110% in the case of an
employee referred to in Section 6.6(ii) below) of the Fair Market Value of the
shares of Common Stock subject to the Incentive Stock Option on the date the
Incentive Stock Option is granted. The Non-Qualified Stock Option exercise price
shall be fixed by the Committee but shall in no event be less than 100% of the
Fair Market Value of the shares of Common Stock subject to the Non-Qualified
Stock Option at the time the Stock Option is granted. Notwithstanding the
foregoing, the Company may, in exchange for options for membership units in
CrossPoint Energy, LLC, a Texas limited liability company, after the merger of
such entity with a subsidiary of the Company, issue Stock Options with exercise
prices less than 100% of the Fair Market Value of the shares of Common Stock
subject to the Stock Options at the time such Stock Options are granted.
 
6.3  Exercise Term. Each Stock Option agreement shall state the period or
periods of time within which the Stock Option may be exercised, in whole or in
part, which shall be such period or periods of time as may be determined by the
Committee, provided that no Stock Option shall be exercisable after ten years
from the date of grant thereof (or, in the case of an Incentive Stock Option
granted to an employee referred to in Section 6.6(ii) below, such term shall in
no event exceed five years from the date on which such Incentive Stock Option is
granted). The Committee shall have the power to permit an acceleration of
previously established exercise upon such circumstances and subject to such
terms and conditions as the Committee deems appropriate.
 
6.4  Payment for Shares. A Stock Option shall be deemed to be exercised when
written notice of such exercise has been given to the Company in accordance with
the terms of the Stock Option agreement by the Participant entitled to exercise
the Stock Option and full payment for the shares of Common Stock with respect to
which the Stock Option is exercised has been received by the Company. The
Committee, in its sole discretion, may permit the exercise price for any Stock
Option to be paid by (i) cash, certified or cashier’s check, bank draft, money
order, wire transfer payable to the order of the Company, free from all
collection charges; (ii) delivery of shares of Common Stock already owned by the
Participant and having a Fair Market Value equal to the aggregate exercise
price, or by a combination of cash and shares of Common Stock, in each case to
the extent permitted by applicable law and not in violation of any instrument or
agreement to which the Company is a party and, unless approved by the Committee,
not resulting in a charge to the Company’s reported earnings; or (iii) delivery
(including by facsimile or by electronic mail) 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 and any tax withholding obligations that
may arise in connection with such exercise (otherwise known as a “cashless
exercise”). No shares of Common Stock shall be issued to any Participant upon
exercise of a Stock Option until the Company receives full payment therefor as
described above. Upon the receipt of notice of exercise and full payment for the
shares of Common Stock, the shares of Common Stock shall be deemed to have been
issued and the Participant shall be entitled to receive such shares of Common
Stock and shall be a stockholder with respect to such shares, and the shares of
Common Stock shall be considered fully paid and nonassessable. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date on which the Common Stock is issued, except as provided in Section 21
of the Plan. Each exercise of a Stock Option shall reduce, by an equal number,
the total number of shares of Common Stock that may thereafter be purchased
under such Stock Option.
 
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6.5  Rights upon Termination of Continuous Service. In the event that a
Participant’s Continuous Service terminates for any reason, other than death or
Disability, any rights of the Participant under any Stock Option shall
immediately terminate; provided, however, that the Participant (or any successor
or legal representative) shall have the right to exercise the Stock Option to
the extent that the Stock Option was exercisable at the time of termination,
until the earlier of (i) the date that is three months after the effective date
of such termination of Continuous Service, or such other date as determined by
the Committee in its sole discretion, or (ii) the expiration of the term of the
Stock Option.
 
Notwithstanding the foregoing, the Participant (or any successor or legal
representative) shall not have any rights under any Stock Option to the extent
that such Stock Option has not previously been exercised, and the Company shall
not be obligated to sell or deliver shares of Common Stock (or have any other
obligation or liability) under such Stock Option if the Committee shall
determine in its sole discretion that the Participant’s Continuous Service shall
have been terminated for “Cause” (as such term is defined in the Participant’s
Stock Option agreement or employment agreement, if any), which determination
shall be made in good faith. If there is a conflict between the definition of
Cause as defined in the Participant’s Stock Option agreement and as defined in
the Participant’s employment agreement, if any, the most restrictive definition
of Cause shall apply unless the employment agreement expressly provides
otherwise. In the event of such determination, the Participant (or any successor
or legal representative) shall have no right under any Stock Option, to the
extent that such Stock Option has not previously been exercised, to purchase any
shares of Common Stock. Any Stock Option may be terminated entirely by the
Committee at the time or at any time subsequent to a determination by the
Committee under this Section 6.5 which has the effect of eliminating the
Company’s obligation to sell or deliver shares of Common Stock under such Stock
Option.
 
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In the event that a Participant’s Continuous Service terminates because such
Participant dies or suffers a Disability prior to the expiration of the Stock
Option and without the Participant’s having fully exercised the Stock Option,
the Participant or his or her successor or legal representative shall be fully
vested in the Stock Option and shall have the right to exercise the Stock Option
within the next 12 months following such event, or such other period as
determined by the Committee in its sole discretion, but not later than the
expiration of the term of the Stock Option.
 
6.6  Special Incentive Stock Option Rules. Notwithstanding the foregoing, in the
case of an Incentive Stock Option, each Stock Option agreement shall contain
such other terms, conditions and provisions as the Committee determines
necessary or desirable in order to qualify such Stock Option as an Incentive
Stock Option under the Code including, without limitation, the following:
 
(i)  To the extent that the aggregate Fair Market Value (determined as of the
time the Stock Option is granted) of the Common Stock, with respect to which
Incentive Stock Options granted under this Plan (and all other plans of the
Company, any Parent Company and any Subsidiary) become exercisable for the first
time by any person in any calendar year, exceeds $100,000, such Stock Options
shall be treated as Non-Qualified Stock Options.
 
(ii)  No Incentive Stock Option shall be granted to any employee if, at the time
the Incentive Stock Option is granted, the employee (by reason of the
attribution rules applicable under Section 424(d) of the Code) owns more than
10% of the combined voting power of all classes of stock of the Company or any
Parent Company or Subsidiary unless at the time such Incentive Stock Option is
granted the Stock Option exercise price is at least 110% of the Fair Market
Value (determined as of the time the Incentive Stock Option is granted) of the
shares of Common Stock subject to the Incentive Stock Option and such Incentive
Stock Option by its terms is not exercisable after the expiration of five years
from the date of grant.
 
If an Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, such Stock Option
shall thereafter be treated as a Non-Qualified Stock Option.
 
6.7  Conversion of Director Fees. The Board may, at its sole discretion, permit
an Outside Director to receive all or a portion of his or her annual retainer
fee, any fees for attending meetings of the Board or committees thereof,
committee chairmanship fees or any other fees payable to an Outside Director in
the form of a Stock Option. The terms and conditions of such Stock Option,
including (without limitation) the method for converting the annual retainer fee
or any other fee payable to an Outside Director into a Stock Option, the date of
grant, the vesting schedule, if any, and the time period for an Outside Director
to elect such a Stock Option shall be determined solely by the Board. The
Board’s decision shall be final, binding and conclusive.
 
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Section 7.  Stock Appreciation Rights. Stock Appreciation Rights entitle
Participants to increases in the Fair Market Value of shares of Common Stock.
The terms and conditions of each Stock Appreciation Right granted under the Plan
shall be specified by the Committee, in its sole discretion, and shall be set
forth in a written agreement between the Company and the Participant in such
form as the Committee shall approve from time to time or as may be reasonably
required in view of the terms and conditions approved by the Committee from time
to time. The agreements shall contain in substance the following terms and
conditions and may contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.
 
7.1  Award. Stock Appreciation Rights shall entitle the Participant, subject to
such terms and conditions determined by the Committee, to receive upon exercise
thereof an Award equal to all or a portion of the excess of: (i) the Fair Market
Value of a specified number of shares of Common Stock at the time of exercise
over (ii) a specified price which shall not be less than 100% of the Fair Market
Value of the Common Stock at the time the right is granted. Such amount may be
paid by the Company in cash, Common Stock (valued at its then Fair Market Value)
or any combination thereof, as the Committee may determine. In the event of the
exercise of a Stock Appreciation Right that is fully or partially settled in
shares of Common Stock, the number of shares reserved for issuance under this
Plan shall be reduced by the number of shares issued upon exercise of the Stock
Appreciation Right.
 
7.2  Term. Each agreement shall state the period or periods of time within which
the Stock Appreciation Right may be exercised, in whole or in part, subject to
such terms and conditions prescribed for such purpose by the Committee, provided
that no Stock Appreciation Right shall be exercisable after ten years from the
date of grant thereof. The Committee shall have the power to permit an
acceleration of previously established exercise terms upon such circumstances
and subject to such terms and conditions as the Committee deems appropriate.
 
7.3  Rights upon Termination of Continuous Service. In the event that a
Participant’s Continuous Service terminates for any reason, other than death or
Disability, any rights of the Participant under any Stock Appreciation Right
shall immediately terminate; provided, however, the Participant (or any
successor or legal representative) shall have the right to exercise the Stock
Appreciation Right to the extent that the Stock Appreciation Right was
exercisable at the time of termination, until the earlier of (i) the date that
is three months after the effective date of such termination of Continuous
Service, or such other date as determined by the Committee in its sole
discretion, or (ii) the expiration of the term of the Stock Appreciation Right.
 
Notwithstanding the foregoing, the Participant (or any successor or legal
representative) shall not have any rights under any Stock Appreciation Right, to
the extent that such Stock Appreciation Right has not previously been exercised,
and the Company shall not be obligated to pay or deliver any cash, Common Stock
or any combination thereof (or have any other obligation or liability) under
such Stock Appreciation Right if the Committee shall determine in its sole
discretion that the Participant’s Continuous Service shall have been terminated
for “Cause” (as such term is defined in the Participant’s Stock Appreciation
Right agreement or employment agreement, if any), which determination shall be
made in good faith. If there is a conflict between the definition of Cause as
defined in the Participant’s Stock Appreciation Right agreement and as defined
in the Participant’s employment agreement, if any, the most restrictive
definition of Cause shall apply unless the employment agreement expressly
provides otherwise. In the event of such determination, the Participant (or any
successor or legal representative) shall have no right under such Stock
Appreciation Right, to the extent that such Stock Appreciation Right has not
previously been exercised. Any Stock Appreciation Right may be terminated
entirely by the Committee at the time of or at any time subsequent to the
determination by the Committee under this Section 7.3 which has the effect of
eliminating the Company’s obligations under such Stock Appreciation Right.
 
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In the event that a Participant’s Continuous Service terminates because such
Participant dies or suffers a Disability prior to the expiration of his or her
Stock Appreciation Right and without having fully exercised his or her Stock
Appreciation Right, the Participant or his or her successor or legal
representative shall be fully vested in the Stock Appreciation Right and shall
have the right to exercise any Stock Appreciation Right within the next 12
months following such event, or such other period as determined by the Committee
in its sole discretion, but not later than the expiration of the Stock
Appreciation Right.
 
Section 8.  Restricted Stock Awards. Restricted Stock Awards shall consist of
shares of Common Stock restricted against transfer (“Restricted Stock”) and
subject to a substantial risk of forfeiture. The Committee may, in its sole
discretion, grant Restricted Stock at no cost to a Participant or it may
establish a cost (the “Purchase Price”), which may be less than or equal to the
Fair Market Value of a share of Common Stock on the date of grant, for each
share of Restricted Stock granted to a Participant. The terms and conditions of
each Restricted Stock Award granted under the Plan shall be specified by the
Committee, in its sole discretion, and shall be set forth in a written agreement
between the Company and the Participant in such form as the Committee shall
approve from time to time or as may be reasonably required in view of the terms
and conditions approved by the Committee from time to time. The agreements shall
contain in substance the following terms and conditions and may contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable.
 
8.1  Vesting Period. Restricted Stock Awards shall be subject to the
restrictions described in the preceding paragraph over such vesting period as
the Committee determines. To the extent the Committee deems necessary or
appropriate to protect against loss of deductibility pursuant to Section 162(m)
of the Code, Restricted Stock Awards to any Participant may also be subject to
certain conditions with respect to attainment of one or more preestablished
performance objectives which shall relate to corporate, subsidiary, division,
group or unit performance in terms of growth in gross revenue, earnings per
share or ratios of earnings to equity or assets, net profits, stock price,
market share, sales or costs. In order to take into account unforeseen events or
changes in circumstances, such objectives may be adjusted by the Committee in
its sole discretion; provided, to the extent the Committee deems necessary or
appropriate to protect against loss of deductibility pursuant to Section 162(m)
of the Code, such objectives may not be adjusted by the Committee to increase an
Award but only to reduce or eliminate an Award.
 
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8.2  Restriction upon Transfer. Shares awarded, and the right to vote such
shares and to receive dividends thereon, may not be sold, assigned, transferred,
exchanged, pledged, hypothecated or otherwise encumbered, except as herein
provided or as provided in any agreement entered into between the Company and a
Participant in connection with the Plan, during the vesting period applicable to
such shares. Notwithstanding the foregoing, and except as otherwise provided in
the Plan, the Participant shall have all the other rights of a stockholder
including, but not limited to, the right to receive dividends and the right to
vote such shares, until such time as the Participant disposes of the shares or
forfeits the shares pursuant to the agreement relating to the Restricted Stock
Award.
 
8.3  Certificates. Any stock certificate issued in respect of shares awarded to
a Participant shall be registered in the name of the Participant and deposited
with the Company, or its designee, and shall bear the following legend:
 
“THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS
AND CONDITIONS (INCLUDING FORFEITURE PROVISIONS AND RESTRICTIONS AGAINST
TRANSFER) CONTAINED IN THE CROSSPOINT ENERGY COMPANY 2006 EQUITY INCENTIVE PLAN
AND A RESTRICTED STOCK AWARD AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER
AND CROSSPOINT ENERGY COMPANY RELEASE FROM SUCH TERMS AND CONDITIONS SHALL BE
OBTAINED ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE PLAN AND AGREEMENT, A
COPY OF EACH OF WHICH IS ON FILE IN THE OFFICE OF THE SECRETARY OF CROSSPOINT
ENERGY COMPANY”
 
Each Participant, as a condition of any Restricted Stock Award, shall have
delivered a stock power, endorsed in blank, relating to the Common Stock covered
by such Award.
 
8.4  Termination of Continuous Service. Except as otherwise provided in the
written agreement relating to the Participant’s Restricted Stock Award, in the
event that a Participant’s Continuous Service terminates for any reason, other
than death or Disability, any rights of the Participant or his or her successors
or legal representatives under any Restricted Stock Award that remains subject
to restrictions shall immediately terminate and any Restricted Stock Award with
unlapsed restrictions shall be forfeited to the Company without payment of any
consideration; provided that, if a Participant paid a Purchase Price in
connection with the grant of a share of Restricted Stock, upon forfeiture of
such a share of Restricted Stock the Company shall pay to the Participant, as
soon as reasonably practicable following such forfeiture, the lesser of (i) the
Purchase Price or (ii) the Fair Market Value of a share of Common Stock on the
date of forfeiture. If an amount due to a Participant under this Section 8.4
exceeds $50,000, the Committee may, in its sole discretion, pay any amount
exceeding $50,000 in a series of up to ten equal annual installments, with the
first installment payment due on the first anniversary of the date of
forfeiture.
 
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Unless the written agreement between the Participant and the Company relating to
the Restricted Stock Award provides otherwise, in the event that a Participant’s
Continuous Service terminates because such Participant dies or suffers a
Disability, all remaining shares of a Restricted Stock Award shall no longer be
subject to any unlapsed restrictions.
 
Section 9.  Stock Bonus Awards. Stock Bonus Awards shall consist of Awards of
shares of Common Stock. To the extent the Committee deems necessary or
appropriate to protect against the loss of deductibility pursuant to Section
162(m) of the Code, the Committee may, in its sole discretion, grant a Stock
Bonus Award based upon corporate, division, subsidiary, group or unit
performance in terms of growth in gross revenue, earnings per share or ratios of
earnings to equity or assets, net profits, stock price, market share, sales or
costs or, with respect to Participants not subject to Section 162(m) of the
Code, such other measures or standards determined by the Committee in its
discretion. In order to take into account unforeseen events or changes in
circumstances, such performance objectives may be adjusted; provided, to the
extent the Committee deems necessary or appropriate to protect against loss of
deductibility pursuant to Section 162(m) of the Code, such performance
objectives may not be adjusted by the Committee to increase an Award but only to
reduce or eliminate an Award.
 
The terms and conditions of each Stock Bonus Award granted under the Plan shall
be specified by the Committee, in its sole discretion, and shall be set forth in
a written agreement between the Company and the Participant in such form as the
Committee shall approve from time to time or as may be reasonably required in
view of the terms and conditions approved by the Committee from time to time. In
any event, each Stock Bonus Award agreement must provide that such Stock Bonus
Award shall be payable to the Participant no later than two and one half months
following the end of the calendar year in which the Participant became vested in
such Stock Bonus Award in order to satisfy the short-term deferral rule
applicable under Section 409A of the Code. In addition to any applicable
performance goals, shares of Common Stock subject to a Stock Bonus Award may be:
(i) subject to additional restrictions (including, without limitation,
restrictions on transfer) or (ii) granted directly to a person free of any
restrictions, not inconsistent with the terms of the Plan, as the Committee
shall deem desirable.
 
Section 10.  Other Stock-Based Awards. Other Stock-Based Awards may be awarded,
subject to limitations under applicable law and this Plan, that are denominated
or payable in, valued in whole or in part by reference to, or otherwise based
on, or related to, shares of Common Stock, as deemed by the Committee to be
consistent with the purposes of the Plan, including, without limitation,
purchase rights, convertible or exchangeable debentures, or other rights
convertible into shares of Common Stock and Awards valued by reference to the
value of securities of or the performance of specified Subsidiaries. Other
Stock-Based Awards may be awarded either alone or in addition to or in tandem
with any other Awards under the Plan or any other plan of the Company. The terms
and conditions of each Other Stock-Based Award granted under the Plan shall be
specified by the Committee, in its sole discretion, and shall be set forth in a
written agreement between the Company and the Participant in such form as the
Committee shall approve from time to time or as may be reasonably required in
view of the terms and conditions approved by the Committee from time to time.
Each Other Stock-Based Award granted under this Plan must satisfy the
requirements of, or be exempt from, Section 409A of the Code.
 
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To the extent the Committee deems necessary or appropriate to protect against
loss of deductibility pursuant to Section 162(m) of the Code, Other Stock-Based
Awards to any Participant may also be subject to certain conditions with respect
to attainment of one or more preestablished performance objectives which shall
relate to corporate, subsidiary, division, group or unit performance in terms of
growth in gross revenue, earnings per share or ratio of earnings to equity or
assets, net profits, stock price, market share, sales or costs. In order to take
into account unforeseen events or changes in circumstances, such performance
objectives may be adjusted; provided, to the extent the Committee deems
necessary or appropriate to protect against loss of deductibility pursuant to
Section 162(m) of the Code, such performance objectives may not be adjusted by
the Committee to increase an Award but only to reduce or eliminate an Award.
 
Section 11.  Loans. The Committee may, in its sole discretion and to further the
purpose of the Plan, provide for loans to persons in connection with all or any
part of an Award under the Plan. Any loan made pursuant to this Section 11 shall
be evidenced by a loan agreement, promissory note or other instrument in such
form and which shall contain such terms and conditions (including without
limitation, provisions for interest, payment, schedules, collateral,
forgiveness, acceleration of such loans or parts thereof or acceleration in the
event of termination) as the Committee shall prescribe from time to time.
Notwithstanding the foregoing, each loan shall comply with all applicable laws,
regulations and rules of the Board of Governors of the Federal Reserve System
and any other governmental agency having jurisdiction.
 
Section 12.  Securities Law Requirements. No shares of Common Stock shall be
issued upon the exercise or payment of any Award unless and until:
 
(i)  The shares of Common Stock underlying the Award have been registered under
the Securities Act of 1933, as amended (the “Act”), or the Company has
determined that an exemption from the registration requirements under the Act is
available or the registration requirements of the Act do not apply to such
exercise or payment;
 
(ii)  The Company has determined that all applicable listing requirements of any
stock exchange or quotation system on which the shares of Common Stock are
listed have been satisfied; and
 
(iii)  The Company has determined that any other applicable provision of state
or Federal law, including without limitation applicable state securities laws,
has been satisfied.
 
Section 13.  Restrictions on Transfer; Representations of Participant; Legends.
Regardless of whether the offering and sale of shares of Common Stock has been
registered under the Act or has been registered or qualified under the
securities laws of any state, the Company may impose restrictions upon the sale,
pledge, or other transfer of such shares, including the placement of appropriate
legends on stock certificates, if, in the judgment of the Company and its
counsel, such restrictions are necessary or desirable in order to achieve
compliance with the provisions of the Act, the securities laws of any state, or
any other law. As a condition to the Participant’s receipt of shares, the
Company may require the Participant to represent that such shares are being
acquired for investment, and not with a view to the sale or distribution
thereof, except in compliance with the Act, and to make such other
representations as are deemed necessary or appropriate by the Company and its
counsel. Stock certificates evidencing shares acquired pursuant to an
unregistered transaction to which the Act applies shall bear a restrictive
legend substantially in the following form and such other restrictive legends as
are required or deemed advisable under the Plan or the provisions of any
applicable law:
 
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“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1993, AS AMENDED (THE “ACT”), OR QUALIFIED UNDER THE
SECURITIES LAWS OF ANY STATE. THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF, AND
MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION UNDER THE ACT AND QUALIFICATION UNDER ANY
APPLICABLE STATE SECURITIES LAWS, OR WITHOUT AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION OR QUALIFICATION IS NOT
REQUIRED.”
 
The Company may, but shall not be obligated to, register or qualify the sale of
shares under the Act or other applicable law. In the event of a public offering
of Common Stock or any other securities of the Company, it may be necessary for
the Company to restrict for a period of time (during or following the offering
process) the transfer of shares of Common Stock issued to a Participant under
the Plan (including any securities issued with respect to such shares in
accordance with Section 21 of the Plan). As a condition to the Participant’s
receipt of shares, the Committee may require the Participant to agree not to
effect any sale, transfer, pledge or other disposal of the Participant’s shares
during such time and agree to execute any “lock-up letter” or similar agreement
requested by the Company or its underwriters. Any determination by the Company
and its counsel in connection with any of the matters set forth in this Section
13 shall be conclusive and binding on all persons.

Section 14.  Single or Multiple Agreements. Multiple forms of Awards or
combinations thereof may be evidenced by a single agreement or multiple
agreements, as determined by the Committee.
 
Section 15.  Rights of a Stockholder. The recipient of any Award under the Plan,
unless otherwise expressly provided by the Plan, shall have no rights as a
stockholder with respect thereto unless and until shares of Common Stock are
issued to him.
 
Section 16.  No Right to Continue Employment or Service. Nothing in the Plan or
any instrument executed or Award granted pursuant thereto shall confer upon any
Participant any right to continue to serve the Company, Parent Company or any
Subsidiary in the capacity in effect at the time the Award was granted or shall
affect the right of the Company, Parent Company or any Subsidiary to terminate
(i) the employment of an employee with or without notice and with or without
cause, (ii) the service of a consultant or adviser pursuant to the terms of such
consultant’s or adviser’s agreement with the Company, Parent Company or any
Subsidiary, if any or (iii) the service of a director pursuant to the Bylaws of
the Company, Parent Company or any Subsidiary and any applicable provisions of
the corporate law of the state in which the Company, Parent Company or any
Subsidiary is incorporated, as the case may be.
 
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Section 17.  Withholding. The Company’s obligations hereunder in connection with
any Award shall be subject to applicable foreign, federal, state and local
withholding tax requirements. Foreign, federal, state and local withholding tax
due under the terms of the Plan may be paid in cash or shares of Common Stock
(either through the surrender of already-owned shares of Common Stock that the
Participant has held for the period required to avoid a charge to the Company’s
reported earnings or the withholding of shares of Common Stock otherwise
issuable upon the exercise or payment of such Award) having a Fair Market Value
equal to the required withholding and upon such other terms and conditions as
the Committee shall determine; provided, however, the Committee, in its sole
discretion, may require that such taxes be paid in cash; and provided, further,
any election by a Participant subject to Section 16(b) of the Exchange Act to
pay his or her withholding tax in shares of Common Stock shall be subject to and
must comply with Rule 16b-3 of the Exchange Act.
 
Section 18.  Indemnification. No member of the Board or the Committee, nor any
officer or employee of the Company or Parent Company or Subsidiary 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 or the Committee and each and any officer or
employee of the Company or any Parent Company or any Subsidiary acting on their
behalf shall, to the extent permitted by law, be fully indemnified and protected
by the Company in respect of any such action, determination or interpretation.
 
Section 19.  Non-Assignability. No right or benefit hereunder shall in any
manner be subject to the debts, contracts, liabilities or torts of the person
entitled to such right or benefit. No Award under the Plan shall be assignable
or transferable by the Participant except by will, by the laws of descent and
distribution and by such other means as the Committee may approve from time to
time, and all Awards shall be exercisable, during the Participant’s lifetime,
only by the Participant.
 
However, the Participant, with the approval of the Committee, may transfer a
Non-Qualified Stock Option for no consideration to or for the benefit of the
Participant’s Immediate Family (including, without limitation, to a trust for
the benefit of the Participant’s Immediate Family or to a partnership or limited
liability company for one or more members of the Participant’s Immediate
Family), subject to such limits as the Committee may establish, and the
transferee shall remain subject to all the terms and conditions applicable to
the Non-Qualified Stock Option prior to such transfer. The foregoing right to
transfer a Non-Qualified Stock Option shall apply to the right to consent to
amendments to the Stock Option agreement and, in the discretion of the
Committee, shall also apply to the right to transfer ancillary rights associated
with the Non-Qualified Stock Option. The term “Immediate Family” shall mean the
Participant’s spouse, parents, children, stepchildren, adoptive relationships,
sisters, brothers and grandchildren (and, for this purpose, shall also include
the Participant).
 
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At the request of the Participant and subject to the approval of the Committee,
Common Stock purchased upon exercise of a Non-Qualified Stock Option may be
issued or transferred into the name of the Participant and his or her spouse
jointly with rights of survivorship.
 
Except as set forth above or in a Stock Option agreement, any attempted
assignment, sale, transfer, pledge, mortgage, encumbrance, hypothecation, or
other disposition of an Award under the Plan contrary to the provisions hereof,
or the levy of any execution, attachment, or similar process upon an Award under
the Plan shall be null and void and without effect.
 
Section 20.  Nonuniform Determinations. The Committee’s determinations under the
Plan (including without limitation determinations of the persons to receive
Awards, the form, amount and timing of such Awards, the terms and provisions of
such Awards and the agreements evidencing same, and the establishment of values
and performance targets) need not be uniform and may be made by it selectively
among persons who receive, or are eligible to receive, Awards under the Plan,
whether or not such persons are similarly situated.
 
Section 21.  Adjustments. In the event of any change in the outstanding shares
of Common Stock, without the receipt of consideration by the Company, by reason
of a stock dividend, stock split, reverse stock split or distribution,
recapitalization, merger, reorganization, reclassification, consolidation,
split-up, spin-off, combination of shares, exchange of shares or other change in
corporate structure affecting the Common Stock and not involving the receipt of
consideration by the Company, the Committee shall make appropriate adjustments
in (a) the aggregate number of shares of Common Stock (i) available for issuance
under the Plan, (ii) for which grants or Awards may be made to any Participant
or to any group of Participants (e.g., Outside Directors), (iii) which are
available for issuance under Incentive Stock Options, (iv) covered by
outstanding unexercised Awards and grants denominated in shares or units of
Common Stock, and (v) underlying Stock Options granted pursuant to Section 6.7,
(b) the exercise or other applicable price related to outstanding Awards or
grants and (c) the appropriate Fair Market Value and other price determinations
relevant to outstanding Awards or grants and shall make such other adjustments
as may be appropriate under the circumstances; provided, that the number of
shares subject to any Award or grant always shall be a whole number.
 
Section 22.  Termination and Amendment. The Board may terminate or amend the
Plan or any portion thereof at any time and the Committee may amend the Plan to
the extent provided in Section 3, without approval of the stockholders of the
Company, unless stockholder approval is required by Rule 16b-3 of the Exchange
Act, applicable stock exchange or NASDAQ or other quotation system rules,
applicable Code provisions, or other applicable laws or regulations. No
amendment, termination or modification of the Plan shall affect any Award
theretofore granted in any material adverse way without the consent of the
recipient.
 
Section 23.  Severability. If any of the terms or provisions of this Plan, or
Awards made under this Plan, conflict with the requirements of Section 162(m) or
Section 422 of the Code with respect to Awards subject to or governed by Section
162(m) or Section 422 of the Code, then such terms or provisions shall be deemed
inoperative to the extent they so conflict with the requirements of Section
162(m) or Section 422 of the Code. With respect to an Incentive Stock Option, if
this Plan does not contain any provision required to be included herein under
Section 422 of the Code (as the same shall be amended from time to time), such
provision shall be deemed to be incorporated herein with the same force and
effect as if such provision had been set out herein. If any provision of the
Plan is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
and the Plan shall be reformed, construed and enforced in such jurisdiction so
as to best give effect to the intent of the Company under the Plan.
 
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Section 24.  Effect on Other Plans. Participation in this Plan shall not affect
an employee’s eligibility to participate in any other benefit or incentive plan
of the Company or any Subsidiary and any Awards made pursuant to this Plan shall
not be used in determining the benefits provided under any other plan of the
Company or any Subsidiary unless specifically provided.
 
Section 25.  Effective Date of the Plan. The Plan shall become effective on the
Effective Date, subject to approval of the stockholders of the Company within
twelve months after the Effective Date.
 
Section 26.  Governing Law. This Plan and all agreements executed in connection
with the Plan shall be governed by, and construed in accordance with, the laws
of the State of Nevada, without regard to its conflicts of law doctrine.
 
Section 27.  Gender and Number. Words denoting the masculine gender shall
include the feminine gender, and words denoting the feminine gender shall
include the masculine gender. Words in the plural shall include the singular,
and the singular shall include the plural.
 
Section 28.  Acceleration of Exercisability and Vesting. The Committee shall
have the power to accelerate the time at which an Award may first be exercised
or the time during which an Award or any part thereof will vest in accordance
with the Plan, notwithstanding the provisions in the Award stating the time at
which it may first be exercised or the time during which it will vest.
 
Section 29.  Modification of Awards. Within the limitations of the Plan and
subject to Sections 21 and 34, the Committee may modify outstanding Awards or
accept the cancellation of outstanding Awards for the granting of new Awards in
substitution therefore. Notwithstanding the preceding sentence, except for any
adjustment described in Section 21 or 34, no modification of an Award shall,
without the consent of the Participant, alter or impair any rights or
obligations under any Award previously granted under the Plan in any material
adverse way without the affected Participant’s consent. For purposes of the
preceding sentence, any modification to any of the following terms or conditions
of an outstanding unexercised Award or grant shall be deemed to be a material
modification: (i) the number of shares of Common Stock covered by such Award or
grant, (ii) the exercise or other applicable price or Fair Market Value
determination related to such Award or grant, (iii) the period of time within
which the Award or grant vests and is exercisable and the terms and conditions
of such vesting and exercise, (iv) the type of Award or Stock Option, and (v)
the restrictions on transferability of the Award or grant and of any shares of
Common Stock issued in connection with such Award or grant (including the
Company’s right of repurchase, if any).
 
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Section 30.  No Strict Construction. No rule of strict construction shall be
applied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any agreement executed in
connection with the Plan, any Award granted under the Plan, or any rule,
regulation or procedure established by the Committee.
 
Section 31.  Successors. This Plan is binding on and will inure to the benefit
of any successor to the Company, whether by way of merger, consolidation,
purchase, or otherwise.
 
Section 32.  Plan Provisions Control. The terms of the Plan govern all Awards
granted under the Plan, and in no event will the Committee have the power to
grant any Award under the Plan which is contrary to any of the provisions of the
Plan. In the event any provision of any Award granted under the Plan shall
conflict with any term in the Plan, the term in the Plan shall control.
 
Section 33.  Headings. The headings used in the Plan are for convenience only,
do not constitute a part of the Plan, and shall not be deemed to limit,
characterize, or affect in any way any provisions of the Plan, and all
provisions of the Plan shall be construed as if no captions had been used in the
Plan.
 
Section 34.  Change in Control. In the event of a Change in Control, each
Participant shall have the rights set forth in his individual Award agreement or
such other rights as may be determined by the incumbent Board, in its sole
discretion, prior to the Change in Control.
 
Section 35.  Compliance with Section 409A of the Code. All Awards granted
hereunder shall be granted in compliance with, or shall be structured to be
exempt from, the provisions of Section 409A of the Code. Notwithstanding
anything to the contrary in the Plan, any and all Awards, payments,
distributions, deferral elections, transactions and any other actions or
arrangements made or entered into pursuant to the Plan shall remain subject at
all times to compliance with the requirements of Section 409A of the Code. If
the Committee determines that an Award, payment, distribution, deferral
election, transaction or any other action or arrangement contemplated by the
provisions of the Plan would, if undertaken, cause a Participant to become
subject to Section 409A of the Code, such Award, payment, distribution, deferral
election, transaction or other action or arrangement shall not be undertaken and
the related provisions of the Plan shall be deemed modified or, if necessary,
rescinded in order to comply with the requirements of Section 409A of the Code
to the extent determined by the Committee. Notwithstanding the foregoing, with
respect to any Award granted hereunder that is payable upon vesting and intended
to be exempt from the requirements of Section 409A of the Code, such payment
shall be made paid or otherwise settled as soon as administratively feasible
after the Award becomes vested but in no event later than two and a half months
after the end of the year in which such vesting occurs to satisfy the exemption
from Section 409A of the Code for short-term deferrals of compensation. To the
extent required in order to avoid the imposition of any interest and/or
additional tax under Section 409A(a)(1)(B) of the Code, any payments or
deliveries due upon the Participant’s termination of Continuous Service may be
delayed for six months if a Participant is deemed to be a “specified employee”
as defined by Section 409A(a)(2)(i)(B) of the Code.
 
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CERTIFICATE
 
 
I, [ ], Secretary of CrossPoint Energy Company hereby certify that the attached
document is a correct copy of the CrossPoint Energy Company 2006 Equity
Incentive Plan, as effective ______________, 2006.
 
Dated this ___ day of _____________, 2006.

           
   
   
          

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Secretary       (Corporate Seal)