GENESIS BIOPHARMA, INC.
 
2011 EQUITY INCENTIVE PLAN
 
1.
PURPOSES OF THE PLAN

 
The purposes of the 2011 Equity Incentive Plan (the “Plan”) of Genesis
Biopharma, Inc., a Nevada corporation (the “Company”), are to:
 
1.1      Encourage selected employees, directors, consultants and advisers to
improve operations and increase the profitability of the Company;
 
1.2      Encourage selected employees, directors, consultants and advisers to
accept or continue employment or association with the Company or its Affiliates
(as defined below); and
 
1.3      Increase the interest of selected employees, directors, consultants and
advisers in the Company’s welfare through participation in the growth in value
of the common stock of the Company (the “Common Stock”).  All references herein
to stock or shares, unless otherwise specified, shall mean the Common Stock.
 
2.
TYPES OF AWARDS; ELIGIBLE PERSONS

 
2.1      The Administrator (as defined below) may, from time to time, take the
following action, separately or in combination, under the Plan: (a) grant
“incentive stock options” (“ISOs”) intended to satisfy the requirements of
Section 422 of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder (the “Code”); (b) grant “non-qualified options” (“NQOs,”
and together with ISOs, “Options”); (c) issue or sell shares of Common Stock
(“Restricted Stock”) and (d) grant stock appreciation rights (any such right
would permit the holder to receive the excess of the fair market value of Common
Stock on the exercise date over its fair market value (or a greater base value)
on the grant date (“SARs”)), either in tandem with Options or as separate and
independent grants.  Any such awards may be made to employees, including
employees who are officers or directors, and to individuals described in Section
1 of the Plan who the Administrator believes have made or will make a
contribution to the Company or any Affiliate; provided, however, that only a
person who is an employee of the Company or any Affiliate at the date of the
grant of an Option is eligible to receive ISOs under the Plan.
 
2.2      For purposes of the Plan: (a) the term “Affiliate” means a parent or
subsidiary corporation as defined in the applicable provisions (currently
Section 424(e) and 424(f), respectively) of the Code; (b) the term “employee”
includes an officer or director who is an employee of the Company; (c) the term
“consultant” includes persons employed by, or otherwise affiliated with, a
consultant; and (d) the term “adviser” includes persons employed by, or
otherwise affiliated with, an adviser.
 
2.3      Except as otherwise expressly set forth in the Plan, no right or
benefit under the Plan shall be subject in any manner to anticipation,
alienation, hypothecation, or charge, and any such attempted action shall be
void.  No right or benefit under the Plan shall in any manner be liable for or
subject to debts, contracts, liabilities, or torts of any optionee or any other
person except as otherwise may be expressly required by applicable law.
 
 
 

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3.
STOCK SUBJECT TO THE PLAN; MAXIMUM NUMBER OF GRANTS

 
3.1      Subject to the provisions of Section 3.2, the total number of shares of
Common Stock that may be issued as Restricted Stock or on the exercise of
Options or SARs under the Plan shall not exceed 18,000,000 shares.  The shares
subject to an Option or SAR granted under the Plan that expire, terminate or are
cancelled unexercised shall become available again for grants under the
Plan.  If shares of Restricted Stock awarded under the Plan are forfeited to the
Company or repurchased by the Company, the number of shares forfeited or
repurchased shall again be available under the Plan.  Where the exercise price
of an Option is paid by means of the optionee’s surrender of previously owned
shares of Common Stock or the Company’s withholding of shares otherwise issuable
upon exercise of the Option as may be permitted in the Plan, only the net number
of shares issued and which remain outstanding in connection with such exercise
shall be deemed “issued” and no longer available for issuance under the
Plan.  No eligible person shall be granted Options or other awards during any
twelve-month period covering more than 5,000,000 shares.
 
3.2      If the Common Stock is changed by reason of a stock split, reverse
stock split, stock dividend, recapitalization, combination or reclassification,
then the number and class of shares of stock subject to the Plan that may be
issued under the Plan shall be proportionately adjusted (provided that any
fractional share resulting from such adjustment shall be disregarded).
 
4.
ADMINISTRATION

 
4.1      The Plan shall be administered by the Board of Directors of the Company
(the “Board”) or by a committee (the “Committee”) to which the Board has
delegated administration of the Plan (or of part thereof) (in either case, the
“Administrator”).  The Board shall appoint and remove members of the Committee
in its discretion in accordance with applicable laws.  At the Board’s
discretion, or if necessary in order to comply with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or Section
162(m) of the Code, the Committee shall, in the Board’s discretion, be comprised
solely of “non-employee directors” within the meaning of said Rule 16b-3 or
“outside directors” within the meaning of Section 162(m) of the Code.  The
foregoing notwithstanding, the Administrator may delegate non-discretionary
administrative duties to such employees of the Company as it deems proper and
the Board, in its absolute discretion, may at any time and from time to time
exercise any and all rights and duties of the Administrator under this Plan.
 
 
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4.2      Subject to the other provisions of the Plan, the Administrator shall
have the authority, in its discretion: (a) to grant Options and SARs and grant
or sell Restricted Stock; (b) to determine the fair market value of the shares
of Common Stock subject to Options or other awards; (c) to determine the
exercise price of Options granted, which shall be no less than the fair market
value of the Common Stock on the date of grant, the economic terms of SARs
granted, which shall provide for a benefit of the appreciation on Common Stock
over not less than the value of the Common Stock on the date of grant, or the
offering price of Restricted Stock; (d) to determine the persons to whom, and
the time or times at which, Options or SARs shall be granted or Restricted Stock
granted or sold, and the number of shares subject to each Option or SAR or the
number of shares of Restricted Stock granted or sold; (e) to construe and
interpret the terms and provisions of the Plan, of any applicable agreement and
all Options and SARs granted under the Plan, and of any Restricted Stock award
under the Plan; (f) to prescribe, amend, and rescind rules and regulations
relating to the Plan; (g) to determine the terms and provisions of each Option
and SAR granted and award of Restricted Stock (which need not be identical),
including but not limited to, the time or times at which Options and SARs shall
be exercisable or the time at which the restrictions on Restricted Stock shall
lapse; (h) with the consent of the Grantee, to rescind any award or exercise of
an Option or SAR; (i) to modify or amend the terms of any Option, SAR or
Restricted Stock (with the consent of the Grantee or holder of the Restricted
Stock if the modification or amendment is adverse to the Grantee or holder); (j)
to reduce the purchase price of Restricted Stock or exercise price of any Option
or base price of any SAR; (k) to accelerate or defer (with the consent of the
Grantee) the exercise date of any Option or SAR or the date on which the
restrictions on Restricted Stock lapse; (l) to issue shares of Restricted Stock
to an optionee in connection with the accelerated exercise of an Option by such
optionee; (m) to authorize any person to execute on behalf of the Company any
instrument evidencing the grant of an Option, SAR or award of Restricted Stock;
(n) to determine the duration and purposes of leaves of absence which may be
granted to participants without constituting a termination of their employment
for the purposes of the Plan; and (o) to make all other determinations deemed
necessary or advisable for the administration of the Plan, any applicable
agreement, Option, SAR or award of Restricted Stock.
 
4.3      All questions of interpretation, implementation, and application of the
Plan or any agreement or Option, SAR or award of Restricted Stock shall be
determined by the Administrator, which determination shall be final and binding
on all persons.
 
5.
GRANTING OF OPTIONS AND SARS; AGREEMENTS

 
5.1      No Options or SARs shall be granted under the Plan after 10 years from
the date of adoption of the Plan by the Board.
 
5.2      Each Option and SAR shall be evidenced by a written agreement, in form
satisfactory to the Administrator, executed by the Company and the person to
whom such grant is made (“Grantee,” which term shall include the permitted
successors and assigns of the Grantee with respect to the Option or SAR).  In
the event of a conflict between the terms or conditions of an agreement and the
terms and conditions of the Plan, the terms and conditions of the Plan shall
govern.
 
5.3      Each Option agreement shall specify whether the Option it evidences is
an NQO or an ISO, provided, however, all Options granted under the Plan to
non-employee directors, consultants and advisers of the Company are intended to
be NQOs.
 
5.4      Subject to Section 6.3.3 with respect to ISOs, the Administrator may
approve the grant of Options or SARs under the Plan to persons who are expected
to become employees, directors, consultants or advisers of the Company, but are
not employees, directors, consultants or advisers at the date of approval, and
the date of approval shall be deemed to be the date of grant unless otherwise
specified by the Administrator.
 
 
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5.5      For purposes of the Plan, the term “employment” shall be deemed to
include service as an employee, director, consultant or adviser.  For avoidance
of any doubt, a person who is in the employment of the Company is not
necessarily an “employee” for purposes of ISOs.
 
6.
TERMS AND CONDITIONS OF OPTIONS AND SARS

 
Each Option and SAR granted under the Plan shall be subject to the terms and
conditions set forth in Section 6.1.  NQOs and SARs shall also be subject to the
terms and conditions set forth in Section 6.2, but not those set forth in
Section 6.3.  ISOs shall also be subject to the terms and conditions set forth
in Section 6.3, but not those set forth in Section 6.2.  SARs shall be subject
to the terms and conditions of Section 6.4.
 
6.1      Terms and Conditions to Which All Options and SARs Are Subject.  All
Options and SARs granted under the Plan shall be subject to the following terms
and conditions:
 
6.1.1           Changes in Capital Structure.  Subject to Section 6.1.2, if the
Common Stock is changed by reason of a stock split, reverse stock split, stock
dividend, recapitalization, combination or reclassification, then the number and
class of shares of stock subject to each Option and SAR outstanding under the
Plan, and the exercise price of each outstanding Option and the base value of
SAR, shall be automatically and proportionately adjusted; provided, that the
Company shall not be required to issue fractional shares as a result of any such
adjustments.  Such adjustment, however, in any outstanding Option or SAR shall
be made without change in the total price applicable to the unexercised portion
of the Option or SAR but with a corresponding adjustment in the price for each
share covered by the unexercised portion of the Option or SAR.  Any
determination by the Administrator in connection with these adjustments shall be
final, binding, and conclusive.  If an adjustment under this Section 6.1.1 would
result in a fractional share interest under an option or any installment, the
Administrator’s decision as to inclusion or exclusion of that fractional share
interest shall be final, but no fractional shares of stock shall be issued under
the Plan on account of any such adjustment.
 
6.1.2           Corporate Transactions.  The provisions of this Section 6.1.2
shall apply to all Options and SARs granted under this Plan unless otherwise
provided for in the stock option agreement or in a separate employment or other
agreement between the Grantee and the Company.  To the extent not previously
exercised, all Options and SARs shall terminate immediately prior to the
consummation of a Corporate Transaction (as defined below) unless the
Administrator determines otherwise in its sole discretion, provided, however,
that the Administrator, in its sole discretion, may (i) permit exercise of any
Options and/or SARs prior to their termination, even if such Options and/or SARs
would not otherwise have been exercisable (provided that the Option or SAR has
not expired by its terms and that the Grantee takes all steps necessary to
exercise the Option or SAR prior to the Corporate Transaction as required by the
agreement evidencing the Option or SAR), and/or (ii) provide that all or certain
of the outstanding Options or SARs shall be assumed or an equivalent option
substituted by an applicable successor corporation or any Affiliate of the
successor corporation in the event of a Corporate Transaction.  A “Corporate
Transaction” means (i) a liquidation or dissolution of the Company; (ii) a
merger or consolidation of the Company with or into another corporation or
entity (other than a merger with a wholly-owned subsidiary); or (iii) a sale of
all or substantially all of the assets of the Company in a single transaction or
a series of related transactions.
 
 
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6.1.3           Time of Option or SAR Exercise.  Subject to Section 5 and 6.3.4,
an Option or SAR granted under the Plan shall be exercisable (a) immediately as
of the effective date of the applicable agreement granting the Option or SAR or
(b) in accordance with a schedule or performance criteria as may be set by the
Administrator and specified in the applicable agreement.  However, in no case
may an Option or SAR be exercisable until the Company and the Grantee execute a
written agreement in form and substance satisfactory to the Company.
 
6.1.4           Grant Date.  The date of grant of an Option or SAR under the
Plan shall be the date approved or any date thereafter specified by the
Administrator in such approval and reflected as the effective date of the
applicable agreement.
 
6.1.5           Non-Transferability of Rights.  Except with the express written
approval of the Administrator, which approval the Administrator is authorized to
give only with respect to NQOs and SARs, no Option or SAR granted under the Plan
shall be assignable or otherwise transferable by the Grantee except by will or
by the laws of descent and distribution.  During the life of the Grantee, an
Option or SAR shall be exercisable only by the Grantee or permitted transferee.
 
6.1.6           Payment.  Except as provided below, payment in full, in cash,
shall be made for all Common Stock purchased at the time written notice of
exercise of an Option is given to the Company and the proceeds of any payment
shall be considered general funds of the Company.  The Administrator in its sole
discretion may include in any Option agreement, or separately approve in
connection with the exercise of any Option, any one or more of the following
additional methods of payment (provided such payment does not violate applicable
law or regulations or the rules of any securities exchange on which the
Company’s securities may be listed):
 
(a)           Subject to the Sarbanes-Oxley Act of 2002, acceptance of the
Grantee’s full recourse promissory note for all or part of the Option price,
payable on such terms and bearing such interest rate as determined by the
Administrator (but in no event less than the minimum interest rate specified
under the Code at which no additional interest or original issue discount would
be imputed), which promissory note may be either secured or unsecured in such
manner as the Administrator shall approve (including, without limitation, by a
security interest in the shares of the Company);
 
(b)           Delivery by the optionee of shares of Common Stock already owned
by the optionee for all or part of the Option price, provided the fair market
value (determined as set forth in Section 6.1.10) of such shares of Common Stock
is equal on the date of exercise to the Option price, or such portion thereof as
the optionee is authorized to pay by delivery of such stock;
 
 
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(c)           Through the surrender of shares of Common Stock then issuable upon
exercise of the Option, provided the fair market value (determined as set forth
in Section 6.1.10) of such shares of Common Stock is equal on the date of
exercise to the Option price, or such portion thereof as the optionee is
authorized to pay by surrender of such stock; and
 
(d)           By means of so-called cashless exercises through a securities
broker as permitted under applicable rules and regulations of the Securities and
Exchange Commission and the Federal Reserve Board.
 
6.1.7       Termination of Employment.  Unless otherwise provided in the
applicable agreement, if for any reason a Grantee ceases to be employed by at
least the Company or one of its Affiliates, each Option and SAR held by the
Grantee at the date of termination of employment (to the extent then
exercisable) may be exercised in whole or in part at any time (but in no event
after the Expiration Date and or the termination of the Option or SAR pursuant
to Section 6.1.2) within one year of the date of termination in the case of
termination by reason of death or disability; at the commencement of business on
the date of a termination for “cause” (as defined in the applicable agreement or
in any agreement with the Company pertaining to employment); and, in all other
cases, within 90 days of the date of termination.  For purposes of this Section
6.1.7, a Grantee’s employment shall not be deemed to terminate by reason of the
Grantee’s transfer from the Company to an Affiliate, or vice versa, or sick
leave, military leave or other leave of absence approved by the Administrator,
if the period of any such leave does not exceed 90 days or, if longer, if the
Grantee’s right to reemployment by the Company or any Affiliate is guaranteed
either contractually or by statute.
 
6.1.8       Withholding and Employment Taxes.  At the time of exercise and as a
condition thereto, or at such other time as the amount of such obligation
becomes determinable, the Grantee of an Option or SAR shall remit to the Company
in cash all applicable federal and state withholding and employment taxes.  Such
obligation to remit may be satisfied, if authorized by the Administrator in its
sole discretion, after considering any tax, accounting and financial
consequences, by the Grantee’s (a) delivery of a promissory note in the required
amount on such terms as the Administrator deems appropriate, (b) tendering to
the Company previously owned shares of Common Stock or other securities of the
Company with a fair market value equal to the required amount, or (c) agreeing
to have shares of Common Stock (with a fair market value equal to the required
amount), which are acquired upon exercise of the Option or SAR, withheld by the
Company.
 
6.1.9       Other Provisions.  Each Option and SAR granted under the Plan may
contain such other terms, provisions, and conditions not inconsistent with the
Plan as may be determined by the Administrator, and each ISO granted under the
Plan shall include such provisions and conditions as are necessary to qualify
the Option as an “incentive stock option” within the meaning of Section 422 of
the Code.
 
6.1.10     Determination of Fair Market Value.  For purposes of the Plan, the
fair market value of Common Stock or other securities of the Company shall be
determined as follows:
 
 
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(a)           If the stock of the Company is listed on a securities exchange or
is regularly quoted by a recognized securities dealer, and selling prices are
reported, its fair market value shall be the closing price of such stock on the
date the value is to be determined, but if selling prices are not reported, its
fair market value shall be the mean between the high bid and low asked prices
for such stock on the date the value is to be determined (or if there are no
quoted prices for the date of grant, then for the last preceding business day on
which there were quoted prices).
 
(b)           In the absence of an established market for the stock, the fair
market value thereof shall be determined in good faith by the Administrator,
with reference to the Company’s net worth, prospective earning power,
dividend-paying capacity, and other relevant factors, including the goodwill of
the Company, the economic outlook in the Company’s industry, the Company’s
position in the industry, the Company’s management, and the values of stock of
other corporations in the same or a similar line of business.
 
6.1.11     Option and SAR Term.  Subject to Section 6.3.4, no Option or SAR
shall be exercisable more than 10 years after the date of grant, or such lesser
period of time as is set forth in the applicable agreement (the end of the
maximum exercise period stated in the agreement is referred to in the Plan as
the “Expiration Date”).
 
6.2          Terms and Conditions to Which Only NQOs and SARs Are
Subject.  Options granted under the Plan which are designated as NQOs and SARs
shall be subject to the following terms and conditions:
 
6.2.1       Exercise Price.  The exercise price of an NQO and the base value of
an SAR shall be the amount determined by the Administrator as specified in the
option or SAR agreement, but shall not be less than the fair market value of the
Common Stock on the date of grant (determined under Section 6.1.10).
 
6.3          Terms and Conditions to Which Only ISOs Are Subject.  Options
granted under the Plan which are designated as ISOs shall be subject to the
following terms and conditions:
 
6.3.1       Exercise Price.  The exercise price of an ISO shall not be less than
the fair market value (determined in accordance with Section 6.1.10) of the
stock covered by the Option at the time the Option is granted.  The exercise
price of an ISO granted to any person who owns, directly or by attribution under
the Code (currently Section 424(d)), stock possessing more than 10% of the total
combined voting power of all classes of stock of the Company or of any Affiliate
(a “10% Stockholder”) shall in no event be less than 110% of the fair market
value (determined in accordance with Section 6.1.10) of the stock covered by the
Option at the time the Option is granted.
 
6.3.2       Disqualifying Dispositions.  If stock acquired by exercise of an ISO
granted pursuant to the Plan is disposed of in a “disqualifying disposition”
within the meaning of Section 422 of the Code (a disposition within two years
from the date of grant of the Option or within one year after the issuance of
such stock on exercise of the Option), the holder of the stock immediately
before the disposition shall promptly notify the Company in writing of the date
and terms of the disposition and shall provide such other information regarding
the Option as the Company may reasonably require.
 
 
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6.3.3       Grant Date.  If an ISO is granted in anticipation of employment as
provided in Section 5.4, the Option shall be deemed granted, without further
approval, on the date the Grantee assumes the employment relationship forming
the basis for such grant, and, in addition, satisfies all requirements of the
Plan for Options granted on that date.
 
6.3.4       Term.  Notwithstanding Section 6.1.11, no ISO granted to any 10%
Stockholder shall be exercisable more than five years after the date of grant.
 
6.4           Terms and Conditions Applicable Solely to SARs.  In addition to
the other terms and conditions applicable to SARs in this Section 6, the holder
shall be entitled to receive on exercise of an SAR only Common Stock at a fair
market value equal to the benefit to be received by the exercise.
 
6.5           Manner of Exercise.  A Grantee wishing to exercise an Option or
SAR shall give written notice to the Company at its principal executive office,
to the attention of the officer of the Company designated by the Administrator,
accompanied by payment of the exercise price and/or withholding taxes as
provided in Sections 6.1.6 and 6.1.8.  The date the Company receives written
notice of an exercise hereunder accompanied by the applicable payment will be
considered as the date such Option or SAR was exercised.  Promptly after receipt
of written notice of exercise and the applicable payments called for by this
Section 6.5, the Company shall, without stock issue or transfer taxes to the
holder or other person entitled to exercise the Option or SAR, deliver to the
holder or such other person a certificate or certificates for the requisite
number of shares of Common Stock.  A holder or permitted transferee of an Option
or SAR shall not have any privileges as a stockholder with respect to any shares
of Common Stock to be issued until the date of issuance (as evidenced by the
appropriate entry on the books of the Company or a duly authorized transfer
agent) of such shares.
 
7.
RESTRICTED STOCK

 
7.1           Grant or Sale of Restricted Stock.
 
7.1.1       No grants or sales of Restricted Stock shall be made under the Plan
after 10 years from the date of adoption of the Plan by the Board.
 
7.1.2       The Administrator may issue Restricted Stock under the Plan for such
consideration (including past or future services, any benefit to the Company,
and, subject to applicable law, recourse promissory notes) and such other terms,
conditions and restrictions as determined by the Administrator.  The
restrictions may include restrictions concerning transferability, repurchase by
the Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Administrator.  If shares are subject
to forfeiture or repurchase by the Company, all dividends or other distributions
paid by the Company with respect to the shares may be retained by the Company
until the shares are no longer subject to forfeiture or repurchase, at which
time all accumulated amounts shall be paid to the recipient.
 
7.1.3       All Common Stock issued pursuant to this Section 7.1 shall be
subject to an agreement, which shall be executed by the Company and the
prospective recipient of the Common Stock prior to the delivery of certificates
representing such stock to the recipient.  The agreement may contain any terms,
conditions, restrictions, representations and warranties required by the
Administrator.  The certificates representing the shares shall bear any legends
required by the Administrator.
 
 
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7.1.4       The Administrator may require any purchaser or grantee of Restricted
Stock to pay to the Company in cash, upon demand, amounts necessary to satisfy
any applicable federal, state or local tax withholding requirements.  If the
purchaser or grantee fails to pay the amount demanded, the Administrator may
withhold that amount from other amounts payable by the Company to the purchaser
or grantee, including salary, subject to applicable law.  With the consent of
the Administrator in its sole discretion, a purchaser may deliver Common Stock
to the Company to satisfy this withholding obligation.
 
7.2           Corporate Transactions.  All restricted stock subject to
forfeiture as of the occurrence of any Corporate Transaction shall be forfeited
immediately prior to the consummation of such Corporate Transaction unless the
Administrator determines otherwise in its sole discretion.  The Administrator,
in its sole discretion, may remove any restrictions as to any outstanding
restricted stock.  The Administrator may, in its sole discretion, provide that
all outstanding restricted stock participate in the Corporate Transaction with
an equivalent stock substituted by an applicable successor corporation subject
to the restriction.
 
8.
EMPLOYMENT OR CONSULTING RELATIONSHIP

 
Nothing in the Plan, any Option or SAR granted under the Plan, or any Restricted
Stock granted or sold under the Plan, shall interfere with or limit in any way
the right of the Company or of any of its Affiliates to terminate the employment
of any Grantee or holder of Restricted Stock or an SAR at any time, nor confer
upon any Grantee or holder of Restricted Stock or an SAR any right to continue
in the employ of, or consult with, or advise, the Company or any of its
Affiliates.
 
9.
CONDITIONS UPON ISSUANCE OF SHARES

 
Notwithstanding the provisions of any Option, SAR or offer of Restricted Stock,
the Company shall have no obligation to issue shares under the Plan unless such
issuance shall be either registered or qualified under applicable securities
laws, including, without limitation, the Securities Act, or exempt from such
registration or qualification.  The Company shall have no obligation to register
or qualify such issuance under the Securities Act or other securities laws.
 
10.
NON-EXCLUSIVITY OF THE PLAN

 
The adoption of the Plan shall not be construed as creating any limitations on
the power of the Company to adopt such other incentive arrangements as it may
deem desirable, including, without limitation, the granting of stock options
other than under the Plan.
 
11.
MARKET STAND-OFF

 
Each Grantee and recipient of Restricted Stock, if so requested by the Company
or any representative of the underwriters in connection with any registration of
any securities of the Company under the Securities Act, shall not sell or
otherwise transfer any shares of Common Stock acquired upon exercise of Options
or SARs, or such Restricted Stock or receipt of Restricted Stock during a period
of up to 180 days following the effective date of a registration statement of
the Company filed under the Securities Act; provided, however, that such
restriction is applicable to all directors and officers of the Company.
 
 
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12.
AMENDMENTS TO PLAN

 
The Board may at any time amend, alter, suspend or discontinue the
Plan.  Without the consent of a Grantee or holder of Restricted Stock, no
amendment, alteration, suspension or discontinuance may adversely affect such
person’s outstanding Option(s), SAR(s) or the terms applicable to Restricted
Stock except to conform the Plan and ISOs granted under the Plan to the
requirements of federal or other tax laws relating to ISOs.  No amendment,
alteration, suspension or discontinuance to the Plan shall require stockholder
approval unless (a) stockholder approval is required to preserve incentive stock
option treatment for federal income tax purposes; (b) the Board otherwise
concludes that stockholder approval is advisable; or (c) such approval is
required under the rules of any securities exchange on which securities of the
Company are registered.
 
13.
COMPLIANCE WITH CALIFORNIA CODE OF REGULATIONS.

 
13.1         Except during any period in which the grant of Options and grant or
sale of Restricted Stock under this Plan is exempt from qualification under the
California Corporate Securities Law of 1968 pursuant to any exemption other than
Section 25102(o) of such Law, the Plan, all Options granted and all Restricted
Stock granted or sold under the Plan shall comply with Sections 260.140.41,
260.140.42, 260.140.45 and 260.140.46 of Title 10 of the California Code of
Regulations, as in effect and as from time to time amended (“Title 10”),
including the following (which shall be deemed modified or amended by any
corresponding change in the applicable regulations):
 
13.1.1  At no time shall the total number of securities issuable upon exercise
of all outstanding options (excluding options, warrants and rights excluded by
Section 260.140.45) and the total number of shares provided for under any stock
bonus or similar plan or agreement of the Company exceed the 30% limitation set
forth in Section 260.140.45 of Title 10 based on the securities of the Company
which are outstanding at the time the calculation is made.
 
13.1.2  The exercise price of the Option, and the purchase price of Restricted
Stock, shall not be less than 85% (100% in the case of any person who owns
securities possessing more than 10% of the total combined voting power of all
classes of securities of the Company) of the fair market value of the stock
covered by the Option at the time the Option is granted (with fair value and
total combined voting power determined in accordance with Section 260.140.41(b)
and 260.140.42(b), as applicable, of Title 10).  
 
13.1.3  No Option shall be transferable except by will, the laws of descent and
distribution, or as permitted by Rule 701 under the Securities Act of 1933, as
amended.
 
13.1.4  If the Option is granted to an employee other than an officer, director,
manager or consultant, it shall be exercisable at the rate of at least 20% per
year over five years.
 
 
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13.1.5  If the Restricted Stock is sold to an employee other than an officer,
director, manager or consultant, any right to repurchase at the original
purchase price must lapse at the rate of at least 20% per year over five years
and the right to repurchase must be exercised for cash or cancellation of
purchase money indebtedness for the stock within 90 days of termination of
employment.
 
13.1.6  If the Option gives the Company the right to repurchase shares acquired
upon exercise of the Option upon termination of employment, it must comply with
Section 260.140.41 of Title 10.
 
13.1.7  The Option shall remain exercisable (to the extent the optionee is
entitled to exercise on the date of termination of employment) for at least: (i)
six months after the date of termination of employment where termination occurs
by reason of an optionee’s death or disability; or (ii) 30 days after the date
of termination of employment if termination was for any reason other than death,
disability or termination by the Company for cause (as defined in the applicable
agreement or in any agreement with the Company pertaining to employment)
(provided that in each case that the Option shall not be exercisable after the
Expiration Date).
 
13.2         Annual Financial Statements. The Company shall provide to each
Grantee financial statements of the Company at least annually.
 
14.
EFFECTIVE DATE OF PLAN; DISCONTINUANCE OR TERMINATION OF PLAN

 
The Plan became effective on October 14, 2011, the date of adoption by the
Board. The Company will seek stockholder approval in the manner and to the
degree required under applicable laws.  If the Company fails to obtain any
required stockholder approval of the Plan within twelve (12) months after the
date this Plan is adopted by the Board, pursuant to Section 422 of the Code, any
Option granted as an Incentive Stock Option at any time under the Plan will not
qualify as an Incentive Stock Option within the meaning of the Code and will be
deemed to be a Non-Qualified Stock Option.  The Board may at any time adopt a
resolution stating that no more awards will be granted under the Plan.  The Plan
shall terminate upon the first date at which there shall not be any outstanding
Options or SARS or any outstanding Restricted Stock subject to vesting and/or
repurchase conditions following the first to occur of: (a) October __, 2021, or
(b) the date the Board adopts a resolution discontinuing the grant of awards
under the Plan.
 
 
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