Exhibit 10.1

 
 
 

 
GOLDEN EAGLE INTERNATIONAL, INC.
 
REVISED 2009 EQUITY INCENTIVE PLAN
 

 

 

 

Effective Date: October 7, 2009
 
Approved by the Board of Directors on October 7, 2009
 
Approved by the Stockholders on __________, 2009
 
 
 
 
 
 
 

 
 

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Table of Contents

   Page  
ARTICLE I INTRODUCTION
1
 
    1.1           Establishment
1
 
    1.2           Purpose
1
       
ARTICLE II DEFINITIONS
    2.1           Definitions
    2.2           Gender and Number
1
1
5
       
ARTICLE III PLAN ADMINISTRATION
    3.1           General
    3.2           Delegation by Committee
    3.3           Contractual Limitations
5
5
5
6
       
ARTICLE IV STOCK SUBJECT TO THE PLAN
    4.1           Number of Shares
    4.2           Other Shares of Stock
    4.3           Adjustments for Stock Split, Stock Dividend, Etc
    4.4           Other Distributions and Changes in the Stock
    4.5           General Adjustment Rules
    4.6           Determination by the Committee, Etc.
6
6
6
6
7
7
7
       
ARTICLE V CHANGE IN CONTROL
    5.1           Change in Control Provisions Applicable at the Discretion of
the Committee
    5.2           Additional Provisions Related to Options.
    5.3           Company Actions
7
7
9
9
       
ARTICLE VI PARTICIPATION
9
       
ARTICLE VII OPTIONS
    7.1           Grant of Options
    7.2           Stock Option Agreements
    7.3           Restrictions on Incentive Options
    7.4           Transferability
    7.5           Stockholder Privileges
10
10
10
13
13
13
       
ARTICLE VIII RESTRICTED STOCK AWARDS
    8.1           Grant of Restricted Stock Awards
    8.2           Restrictions
    8.3           Privileges of a Stockholder, Transferability
    8.4           Enforcement of Restrictions
13
13
14
14
14
       
ARTICLE IX OTHER GRANTS
14        
ARTICLE X RIGHTS OF PARTICIPANTS
    10.1           Employment or Service
    10.2           Nontransferability of Awards
    10.3           No Plan Funding
14
14
15
15
 

 
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ARTICLE XI GENERAL RESTRICTIONS
    11.1           Investment Representations
    11.2           Compliance with Securities Laws
    11.3           Changes in Accounting or Tax Rules
    11.4           Stockholder Agreements
    11.5           Lock-Up Period
15
15
15
16
16
16
       
ARTICLE XII PLAN AMENDMENT, MODIFICATION AND TERMINATION
16        
ARTICLE XIII WITHHOLDING
    13.1           Withholding Requirement
    13.2           Withholding With Stock
17
17
17
       
ARTICLE XIV REQUIREMENTS OF LAW
    14.1           Requirements of Law
    14.2           Federal Securities Law Requirements
    14.3           Section 409A
    14.4           Participant’s Representations
    14.5           Governing Law
17
17
17
18
18
18
       
ARTICLE XV DURATION OF THE PLAN
18        
ARTICLE XVI EFFECTIVENESS OF THE PLAN
18        

 
 
 
 
 
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GOLDEN EAGLE INTERNATIONAL, INC.
 
REVISED 2009 EQUITY INCENTIVE PLAN
 
ARTICLE I
INTRODUCTION
 
1.1  Establishment     Golden Eagle International, Inc., a Colorado corporation
(the “Company”), adopts this Revised 2009 Equity Incentive Plan (the “Revised
Plan” or “Plan”), effective as of the Effective Date (as defined in Article II
below).  The Revised Plan is established for selected employees, consultants and
advisors and non-employee directors of the Company and its Affiliates (as
defined in Article II below).  The Plan permits the grant of incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, non-qualified stock options, restricted stock awards, and other
stock grants to selected employees, consultants and advisors and non-employee
directors of the Company and its Affiliates.
 
1.2  Purpose     The purpose of the Plan is to provide financial incentives for
selected employees, consultants and advisors, and non-employee directors of the
Company and its Affiliates, thereby promoting the long-term growth and financial
success of the Company by (a) attracting and retaining the most qualified
officers, directors, key employees, and other persons, (b) strengthening the
capability of the Company and its Affiliates to develop, maintain and direct a
competent management team, (c) providing an effective means for selected
employees, consultants and advisors and non-employee directors to acquire and
maintain a direct proprietary interest in the operations and future success of
the Company, (d) motivating employees to achieve long-range performance goals
and objectives, and (e) providing incentive compensation opportunities
competitive with those of other organizations.
 
ARTICLE II  
DEFINITIONS
 
2.1  Definitions    The following terms shall have the meanings set forth below:
 
(a) “Affiliate” means, with respect to the Company, (i) any Subsidiary of the
Company, and (ii) any other corporation or entity that is affiliated with the
Company through stock ownership or otherwise and is designated as an “Affiliate”
by the Board, provided, however, that for purposes of Incentive Options granted
pursuant to the Plan, an “Affiliate” means any parent or subsidiary of the
Company as defined in Section 424 of the Code.
 
(b)  “Award” means an Option, a Restricted Stock Award, grants of Stock pursuant
to Article IX or other issuances of Stock hereunder.
 
(c) “Award Agreement” means an Option Agreement, Restricted Stock Agreement or a
written agreement evidencing any other Award under this Plan.
 
(d)  “Board” means the Board of Directors of the Company.
 
(e) “Change in Control” means any of the following:
 
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(i) Merger; Reorganization.  Any consolidation or merger of the Company with or
into any other corporation or other entity or person, or any other corporate
reorganization, in which the stockholders of the Company immediately prior to
such consolidation, merger or reorganization, own less than 50% of the voting
power of the surviving or successor entity immediately after such consolidation,
merger or reorganization, or any transaction or series of related transactions
to which the Company is a party in which in excess of 50% of the Company’ voting
power is transferred, excluding (A) any consolidation or merger effected
exclusively to change the domicile of the Company, (B) any transaction or series
of transactions principally for bona fide equity financing purposes in which
cash is received by the Company or any successor or indebtedness of the Company
is cancelled or converted or a combination thereof or (C) any transaction or
series of transactions for the purpose of creating a holding company that will
be owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction or series of
transactions; or
 
(ii) Other Transactions.  A sale, lease or other disposition of all or
substantially all of the assets of the Company.
 
(f) “Code” means the Internal Revenue Code of 1986, as it may be amended from
time to time.
 
(g) “Committee” means the Board, or if so delegated by the Board, a committee
consisting of not less than two members of the Board who are empowered hereunder
to take actions in the administration of the Plan. If applicable, the Committee
shall be so constituted at all times as to permit the Plan to comply with
Rule 16b-3 or any successor rule promulgated under the Exchange Act.  Except as
provided in Section 3.2, the Committee shall select Participants from Eligible
Employees, Eligible Consultants and Eligible Non-Employee Directors of the
Company and its Affiliates and shall determine the Awards to be made pursuant to
the Plan and the terms and conditions thereof.
 
(h) “Company” has the meaning given to that term in Section 1.1 hereof.
 
(i) “Disabled” or “Disability” means total and permanent disability as defined
in Section 22(e)(3) of the Code.
 
(j) Domestic Relations Order means any judgment, decree, or order (including
approval of a property settlement agreement) that is made pursuant to a state
domestic relations law and that relates to the provision of child support,
alimony payments, or marital property rights to a spouse, former spouse, child,
or other dependent of a Participant.
 
(k) “Effective Date” means the original effective date of the Revised Plan,
October 7, 2009.
 
(l) “Eligible Consultants” means those consultants and advisors to the Company
or an Affiliate who are determined, by the Committee, to be individuals (i)
whose services are important to the Company or an Affiliate and who are eligible
to receive Awards, other than Incentive Options, under the Plan, and (ii) who
meet the conditions for eligibility under such other exemptions from
registration under the Securities Act as may be applicable.
 
(m) “Eligible Employees” means those employees (including, without limitation,
officers and directors who are also employees) of the Company or any Affiliate,
upon whose judgment, initiative and efforts the Company is, or will become,
largely dependent for the successful conduct of its business.  For purposes of
the Plan, an employee is any individual who provides services to the Company or
any Affiliate as a common law employee and whose remuneration is subject to the
withholding of federal income tax pursuant to Section 3401 of the Code.  The
term “Eligible Employee” shall not include any individual (A) who provides
services to the Company or an Affiliate under an agreement, contract, or any
other arrangement pursuant to which the individual is initially classified as an
independent contractor or (B) whose remuneration for services has not been
treated initially as subject to the withholding of federal income tax pursuant
to Section 3401 of the Code even if the individual is subsequently reclassified
as a common law employee as a result of a final decree of a court of competent
jurisdiction or the settlement of an administrative or judicial
proceeding.  Leased employees may, in the discretion of the Committee, be
treated as employees under this Plan.
 
 
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(n) “Eligible Non-Employee Director” means any person serving on the Board who
is not an employee of the Company or any Affiliate.
 
(o) “Exchange Act” means the Securities Exchange Act of 1934, as it may be
amended from time to time.
 
(p) “Fair Market Value” means, as of a given date, (i) the closing price of a
Share on the principal stock exchange on which the Stock is then trading, if any
(or as reported on any composite index that includes such principal exchange) on
such date, or if Shares were not traded on such date, then on the next preceding
date on which a trade occurred; or (ii) if the Stock is not traded on an
exchange but is quoted on the OTC Bulletin Board or a successor quotation
system, the mean between the closing representative bid and asked prices for the
Stock on such date as reported by the OTC Bulletin Board or such successor
quotation system; or (iii) if the Stock is not publicly traded on an exchange
and not quoted on the OTC Bulletin Board or a successor quotation system, the
Fair Market Value of a Share shall be determined by the Committee acting in good
faith.
 
(q) “Forfeiture Restrictions” has the meaning given to that term in Section 8.2
hereof.
 
(r)  “Incentive Option” means an Option designated as such and granted in
accordance with Section 422 of the Code.
 
(s) “Misconduct” means, unless explicitly provided for otherwise in an Award
Agreement, any of the following: (i) violation of any material term of any
written employment agreement entered into between the Company (or any of its
Affiliates) and the Option Holder; (ii) any grossly negligent, fraudulent,
criminal, malicious or willful act or failure to act on the part of Option
Holder, or any other conduct on Option Holder's part intended to or likely to
injure the business or reputation of the Company or any of its Affiliates, but
shall not include the death or Disability of Option Holder or any absence due to
his or her illness, incapacity or injury as specifically permitted by any
written employment agreement between the Company (or any of its Affiliates) and
Option Holder; (iii) failure to meet the job performance expectations of the
Company or any of its Affiliates after having received written or verbal notice
of the expectations and giving Option Holder a reasonable period of time to meet
expectations; (iv) theft, misuse or misappropriation of property, money or time
of the Company or any of its Affiliates; (v) being intoxicated or under the
influence of alcohol or drugs (not prescribed by a physician) while at work or
performing work-related activities; (vii) disloyalty or breach of Option
Holder's fiduciary duty(ies); (viii) any material unauthorized use or disclosure
by such person of confidential information or trade secrets of the Company or
any of its Affiliates; or (ix) any other reason in the policies of the Company
or any of its Affiliates that would be grounds for discharge of employees of the
Company or such Affiliate.  For purposes of this definition, the terms “Company”
and “Affiliate” shall include any Successor of the Company and/or such
Affiliate.  The foregoing definition shall not in any way preclude or restrict
the right of the Company or any Affiliate (or its respective Successor) to
discharge or dismiss the Option Holder from the Service of the Company or any
Affiliate (or its respective Successor) for any other acts or omissions, but
such other acts or omissions shall not be deemed, for purposes of the Plan, to
constitute grounds for termination for Misconduct.
 
 
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(t) “Non-Qualified Option” means any Option other than an Incentive Option.
 
(u) “Option” means a right to purchase Stock at a stated or formula price for a
specified period of time.  Options granted under the Plan shall be either
Incentive Options or Non-Qualified Options.
 
(v) “Option Agreement” has the meaning given to that term in Section 7.2 hereof.
 
(w) “Option Holder” means a Participant who has been granted one or more Options
under the Plan.
 
(x) “Option Period” means the period of time, determined by the Committee,
during which an Option may be exercised by the Option Holder.
 
(y) “Option Price” has the meaning given to that term in Subsection 7.2(b)
hereof.
 
(z) “Participant” means an Eligible Employee, Eligible Consultant, or Eligible
Non-Employee Director designated by the Committee from time to time during the
term of the Plan to receive one or more Awards available under the Plan.
 
(aa) “Plan” has the meaning given to that term in Section 1.1 hereof.
 
(bb) “Repurchase Rights” has the meaning given to that term in Subsection 7.2(d)
hereof.
 
(cc) “Restricted Stock Agreement” has the meaning given to that term in
Section 8.1 hereof.
 
(dd) “Restricted Stock Award” means an award of Stock granted to a Participant
pursuant to ARTICLE VIII that is subject to certain restrictions imposed in
accordance with the provisions of such Section.
 
(ee) “Section 16” has the meaning given to that term in Subsection 13.2(c)
hereof.
 
(ff) “Securities Act” means the Securities Act of 1933, as it may be amended
from time to time.
 
(gg) “Service” means service to the Company or an Affiliate as an employee, a
non-employee director or a consultant or advisor, except to the extent otherwise
specifically provided in an Award Agreement.  The Committee determines which
leaves of absence count toward Service, and when Service terminates for all
purposes under the Plan.  Further, unless otherwise determined by the Committee,
a Participant’s Service shall not be deemed to have terminated merely because of
a change in capacity in which the Participant provides Service to the Company or
an Affiliate or a transfer between the Company and its Affiliates; provided
there is no interruption or other termination of Service.
 
(hh)  “Share” means one whole share of Stock.
 
(ii)  “Stock” means the $0.0001 par value common stock of the Company.
 
(jj) “Subsidiary” means any corporation more than 50% of the outstanding voting
securities of which are owned by the Company or any other Subsidiary, directly
or indirectly, or a partnership or limited liability company in which the
Company or any Subsidiary is a general partner or manager or holds interests
entitling it to receive more than 50% of the profits or losses of the
partnership or limited liability company.
 
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(kk) “Successor” has the meaning given to that term in Subsection 5.2(a) hereof.
 
(ll) “Tax Date” has the meaning given to that term in Section 13.2 hereof.
 
2.2  Gender and Number
 
.  Except when otherwise indicated by the context, the masculine gender shall
also include the feminine gender, and the definition of any term herein in the
singular shall also include the plural.
 
ARTICLE III       
PLAN ADMINISTRATION
 
3.1  General.  The Plan shall be administered by the Committee.  In accordance
with the provisions of the Plan, the Committee shall, in its sole discretion,
select the Participants from among the Eligible Employees, Eligible Consultants
and Eligible Non-Employee Directors, determine the Awards to be made pursuant to
the Plan, or shares of Stock to be issued thereunder and the time at which such
Awards are to be made, fix the Option Price, period and manner in which an
Option becomes exercisable, establish the duration and nature of Restricted
Stock Award restrictions, establish the terms and conditions applicable to, and
establish such other terms and requirements of the various compensation
incentives under the Plan as the Committee may deem necessary or desirable, and
consistent with the terms of the Plan.  The Committee shall determine the form
or forms of the agreements with Participants that shall evidence the particular
provisions, terms, conditions, rights and duties of the Company and the
Participants with respect to Awards granted pursuant to the Plan, which
provisions need not be identical except as may be provided herein; provided,
however, that Eligible Consultants and Eligible Non-Employee Directors shall not
be eligible to receive Incentive Options.  The Committee may from time to time
adopt such rules and regulations for carrying out the purposes of the Plan as it
may deem proper and in the best interests of the Company.  The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any agreement entered into hereunder in the manner and to the extent
it shall deem expedient and it shall be the sole and final judge of such
expediency.  The Committee and each member thereof, and any person acting
pursuant to authority delegated by the Committee, shall be entitled, in good
faith, to rely or act upon any report or other information furnished by any
executive officer, other officer or employee of the Company or its Affiliates or
the Company’s auditors, consultants or any other agents assisting in the
administration of the Plan.  Members of the Committee, any person acting
pursuant to authority delegated by the Committee, and any officer or employee of
the Company or its Affiliates acting at the direction or on behalf of the
Committee shall not be personally liable for any action or determination taken
or made in good faith with respect to the Plan, and shall, to the extent
permitted by law, be fully indemnified and protected by the Company with respect
to any such action or determination.  The determinations, interpretations and
other actions of the Committee pursuant to the provisions of the Plan shall be
binding and conclusive for all purposes and on all persons.
 
3.2  Delegation by Committee.  The Committee may, from time to time, delegate,
to specified officers of the Company, the power and authority to grant Awards
under the Plan to specified groups of Eligible Employees, Eligible Consultants
and Eligible Non-Employee Directors, subject to such restrictions and conditions
as the Committee, in its sole discretion, may impose.  The delegation shall be
as broad or as narrow as the Committee shall determine.  To the extent that the
Committee has delegated the authority to determine certain terms and conditions
of an Award, all references in the Plan to the Committee’s exercise of authority
in determining such terms and conditions shall be construed to include the
officer or officers to whom the Committee has delegated the power and authority
to make such determination.  At any time that the Company is subject to the
reporting requirements of the Exchange Act or has a class of securities
registered under the Exchange Act, the power and authority to grant Awards to
any Eligible Employee, Eligible Consultant or Eligible Non-Employee Director who
is covered by Section 16(b) of the Exchange Act shall not be delegated by the
Committee.
 
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3.3  Contractual Limitations.  The Committee shall in exercising its discretion
under the Plan comply with all contractual obligations of the Company in effect
from time to time, whether contained in the Company’s Certificate of
Incorporation, By-laws or other binding contract.
 
ARTICLE IV
STOCK SUBJECT TO THE PLAN
 
4.1  Number of Shares.  (a)  The maximum aggregate number of Shares that may be
issued under the Plan pursuant to Awards is 750,000,000 Shares.  Upon exercise
of an option (whether granted under this Plan or otherwise), the Shares issued
upon exercise of such option shall no longer be considered to be subject to an
outstanding Award or option for purposes of the immediately preceding
sentence.  Notwithstanding anything to the contrary contained herein, no Award
granted hereunder shall become void or otherwise be adversely affected solely
because of a change in the number of Shares of the Company that are issued and
outstanding from time to time, provided that changes to the issued and
outstanding Shares may result in adjustments to outstanding Awards in accordance
with the provisions of this ARTICLE IV. The maximum number of Shares that may be
issued under Incentive Options is 750,000,000 Shares.
 
(b)           The Shares may be either authorized and unissued Shares or
previously issued Shares acquired by the Company.  The maximum numbers may be
increased from time to time by approval of the Board and by the stockholders of
the Company if, in the opinion of counsel for the Company, stockholder approval
is required.  Stockholder approval shall not be required for increases solely
pursuant to Section 4.3 below.  The Company shall at all times during the term
of the Plan and while any Options are outstanding retain as authorized and
unissued Stock at least the number of Shares from time to time required under
the provisions of the Plan, or otherwise assure itself of its ability to perform
its obligations hereunder.
 
4.2  Other Shares of Stock.  Any Shares that are subject to an Option that
expires or for any reason is terminated unexercised, any Shares that are subject
to an Award (other than an Option) and that are forfeited, and any Shares
withheld for the payment of taxes or received by the Company as payment of the
exercise price of an Option shall automatically become available for use under
the Plan.
 
4.3  Adjustments for Stock Split, Stock Dividend, Etc.     If the Company shall
at any time increase or decrease the number of its authorized or outstanding
Shares (or both its authorized and outstanding shares) or change in any way the
rights and privileges of such Shares by means of the payment of a stock dividend
or any other distribution upon such Shares payable in Stock, or through a stock
split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock, then in relation to the Stock that is
affected by one or more of the above events, the numbers, exercise price, rights
and privileges of the following shall be increased, decreased or changed in like
manner as if they had been issued and outstanding, fully paid and nonassessable
at the time of such occurrence:  (i) the Shares as to which Awards may be
granted under the Plan, (ii) the Shares then included in each outstanding Award
granted hereunder, (iii) the maximum number of Shares available for grant
pursuant to Incentive Options, and (iv) the number of Shares subject to a
delegation of authority under Section 3.2 of this Plan.
 
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4.4  Other Distributions and Changes in the Stock    If
 
(a) The Company shall at any time distribute with respect to the Stock assets or
securities of persons other than the Company (excluding (i) cash or (ii)
distributions referred to in Section 4.3), or
 
(b) The Company shall at any time grant to the holders of its Stock rights to
subscribe pro rata for additional shares thereof or for any other securities of
the Company, or
 
(c) There shall be any other change (except as described in Section 4.3) in the
number or kind of outstanding Shares or of any stock or other securities into
which the Stock shall be changed or for which it shall have been exchanged,
 
then the Committee shall make an equitable adjustment, in such manner as the
Committee deems appropriate, to the number, class and kind of Shares subject to
outstanding Awards and, if applicable, the Option Price.  Notwithstanding the
foregoing provisions of this Section 4.4, pursuant to Section 8.3 below, a
Participant holding Stock received as a Restricted Stock Award shall have the
right to receive all amounts, including cash and property of any kind,
distributed with respect to the Stock after such Restricted Stock Award was
granted upon the Participant’s becoming a holder of record of the Stock.
 
4.5  General Adjustment Rules.  No adjustment or substitution provided for in
this ARTICLE IV shall require the Company to sell a fractional Share under any
Option, or otherwise issue a fractional Share, and the total substitution or
adjustment with respect to each Option and other Award shall be limited by
deleting any fractional Share.  In the case of any such substitution or
adjustment, the aggregate Option Price for the total number of Shares then
subject to an Option shall remain unchanged but the Option Price per Share under
each such Option shall be equitably adjusted by the Committee to reflect the
greater or lesser number of Shares or other securities into which the Stock
subject to the Option may have been changed, and appropriate adjustments shall
be made to other Awards to reflect any such substitution or adjustment.
 
 
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4.6  Determination by the Committee, Etc.  Adjustments under this ARTICLE IV
shall be made by the Committee, whose determinations with regard thereto shall
be final and binding upon all parties thereto.
 
ARTICLE V
CHANGE IN CONTROL
 
5.1  Change in Control Provisions Applicable at the Discretion of the Committee 
(a) Unless the Option Agreement provides to the contrary pursuant to Section
7.2(d), the Award shall automatically accelerate and vest in full or in part
upon the occurrence of a Change in Control (and any Forfeiture Restrictions or
Repurchase Rights of the Company with respect to unvested Shares received
pursuant to the Award shall immediately terminate), whether or not the Award is
to be assumed in the Change in Control or the Forfeiture Restrictions or
Repurchase Rights of the Company would otherwise continue in effect pursuant to
the Change in Control.
 
(b) Unless the Option Agreement provides to the contrary pursuant to Section
7.2(d), all of the Shares subject to each Option will automatically vest on an
accelerated basis should the Option Holder’s Service terminate by reason of an
involuntary termination within a designated period (12 months, unless otherwise
set forth by the Committee but not to exceed 18 months) following any Change in
Control in which the Option is assumed or otherwise continued in effect and the
Repurchase Rights applicable to the Shares subject to such Option do not
otherwise terminate.  Any Option so accelerated shall remain exercisable for the
fully-vested Shares subject to such Option until the expiration or sooner
termination of the Option Period.  In addition, the Committee may provide that
one or more of the Company’s outstanding Repurchase Rights with respect to
Shares held by the Option Holder at the time of such involuntary termination
shall immediately terminate on an accelerated basis, and the Shares subject to
those terminated rights shall accordingly vest at that time.
 
(c) Unless the Option Agreement provides to the contrary pursuant to Section
7.2(d), any Forfeiture Restrictions with respect to any Restricted Stock Award
shall automatically terminate on an accelerated basis, and the Shares subject to
those terminated Forfeiture Restrictions shall immediately vest, in the event
the Participant’s Service should terminate by reason of an involuntary
termination within a designated period (12 months, unless otherwise set forth by
the Committee but not to exceed 18 months) following any Change in Control in
which those Forfeiture Restrictions are assigned to, and assumed by, the
Successor or otherwise continued in full force and effect.
 
(d) Unless the Option Agreement provides to the contrary pursuant to Section
7.2(d), any Option shall be deemed automatically exercised on a net basis
immediately prior to a Change in Control if (i) the Option Price is less than
the then-current Fair Market Value per Share, and (ii) the Shares subject to the
Option are vested (including vesting by reason of the Change in Control).  Upon
such net exercise, the Option Holder shall be entitled to a number of Shares
computed using the following formula:
 
X =
Y (A–B)
A

 
Where:
X =
the number of Shares to be issued to the Option Holder;

 
 
Y =
the number of Shares purchasable under the Option immediately prior to the
Change in Control;

 
 
A =
the then-current Fair Market Value of one Share of Stock; and

 
 
B =
the per-Share Option Price of the Option.

 
In no event shall the Committee be required to issue any fractional Shares.
 
(e) The Committee shall also have full power and authority, exercisable at the
time an Option is granted or at any time while an Option remains outstanding, to
provide that the Option, if outstanding immediately prior to a Change in Control
and then having an Option Price less than the current Fair Market Value per
Share, shall be automatically cancelled at such time in exchange for a cash
payment equal to the product of (i) the number of vested Shares then subject to
the Option (including Shares that become vested as a result of the Change in
Control) multiplied by (ii) the excess of the (x) Fair Market Value of a Share
on the date of the Change in Control over (y) the Option Price.
 
(f) Notwithstanding any other provision in this ARTICLE V, the Committee shall
have full power and authority, exercisable at the time an Award is granted or at
any time while the Award remains outstanding, to provide for or take any other
Change in Control related action with respect to an Award as the Committee deems
appropriate.  The Committee need not take the same action with respect to all
outstanding Awards or to all outstanding Awards of the same type.
 
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5.2  Additional Provisions Related to Options. (a) Unless explicitly provided
otherwise in an Option Agreement and subject to Section 5.1 above, upon the
consummation of a Change in Control, all outstanding unvested Options (and to
the extent not exercised prior to or in connection with such Change in Control,
all outstanding vested Options) that are not assumed by the successor
corporation or other successor entity (or a parent thereof) (the “Successor”) or
otherwise continued in effect pursuant to the terms of the Change in Control
transaction shall automatically be forfeited and cease to be outstanding.
 
(b) To the extent any Option is assumed in connection with a Change in Control
or otherwise continued in effect, such Option shall be appropriately adjusted,
immediately after such Change in Control, to apply to the number and class of
securities which would have been issuable to the Option Holder in consummation
of such Change in Control, had the Option been exercised immediately prior to
such Change in Control.  Appropriate adjustments shall also be made to (i) the
number and class of securities available for issuance under the Option following
the consummation of such Change in Control and (ii) the exercise price payable
per share under each outstanding Option, provided the aggregate exercise price
payable for such securities shall remain the same.  To the extent the actual
holders of the Company’s outstanding Stock receive cash consideration for their
Stock in consummation of the Change in Control, the Successor may, in connection
with the assumption of the outstanding Options under this Plan, substitute one
or more shares of its own common stock with a fair market value equivalent to
the cash consideration paid per Share of Stock in such Change in Control.
 
5.3  Company Actions .  The grant of Awards under the Plan shall in no way
affect the right of the Company or any Affiliate to adjust, reclassify,
reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its
business or assets.
 
ARTICLE VI
PARTICIPATION
 
Participants in the Plan shall be those Eligible Employees who, in the judgment
of the Committee, are performing, or during the term of their incentive
arrangement will perform, vital services in the management, operation and
development of the Company and its Affiliates, and significantly contribute, or
are expected to significantly contribute, to the achievement of long-term
economic objectives.  Eligible Consultants shall be selected from those
non-employee consultants and advisors to the Company and its Affiliates who have
performed or are performing services important to the operation and growth of
the Company and its Affiliates.  All Eligible Non-Employee Directors selected by
the Board may participate in the Plan.  Participants may be granted from time to
time one or more Awards; provided, however, that the grant of each such Award
shall be separately approved by the Committee and receipt of one such Award
shall not result in automatic receipt of any other Award.  Upon determination by
the Committee that an Award is to be granted to a Participant, written notice
shall be given to such person, specifying the terms, conditions, rights and
duties related thereto.  Each Participant shall, if required by the Committee,
enter into an agreement with the Company, in such form as the Committee shall
determine and which is consistent with the provisions of the Plan, specifying
such terms, conditions, rights and duties.  Awards shall be deemed to be granted
as of the date specified in the grant resolution of the Committee, which date
shall be the date of any related agreement with the Participant.  In the event
of any inconsistency between the provisions of the Plan and any such agreement
entered into hereunder, the provisions of the Plan shall govern.
 
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ARTICLE VII
OPTIONS
 
7.1  Grant of Options.  Coincident with or following designation for
participation in the Plan, a Participant may be granted one or more
Options.  The Committee in its sole discretion shall designate whether an Option
is an Incentive Option or a Non-Qualified Option; provided, however, that only
Non-Qualified Options may be granted to Eligible Consultants and Eligible
Non-Employee Directors.  The Committee may grant both an Incentive Option and a
Non-Qualified Option to an Eligible Employee at the same time or at different
times.  Incentive Options and Non-Qualified Options, whether granted at the same
time or at different times, shall be deemed to have been awarded in separate
grants and shall be clearly identified, and in no event shall the exercise of
one Option affect the right to exercise any other Option or affect the number of
Shares for which any other Option may be exercised.  An Option shall be
considered as having been granted on the date specified in the grant resolution
of the Committee.
 
7.2  Stock Option Agreements.  Each Option granted under the Plan shall be
evidenced by a written stock option agreement (an “Option Agreement”).  An
Option Agreement shall be issued by the Company in the name of the Participant
to whom the Option is granted (the “Option Holder”) and in such form as may be
approved by the Committee.  The Option Agreement shall incorporate and conform
to the conditions set forth in this Section 7.2 as well as such other terms and
conditions that are not inconsistent as the Committee may consider appropriate
in each case.
 
(a)  Number of Shares.  Each Option Agreement shall state that it covers a
specified number of Shares, as determined by the Committee.
 
(b)  Price.  The price at which each Share covered by an Option may be purchased
(the “Option Price”) shall be determined in each case by the Committee and set
forth in the Option Agreement, but in no event shall the price be less than
100% of the Fair Market Value of one Share of Stock on the date the Option is
granted.
 
(c)  Duration of Options; Vesting.  Each Option Agreement shall state the Option
Period applicable to the Option, which must end, in all cases, not more than ten
years from the date the Option is granted.  Each Option Holder shall become
vested in the Shares underlying the Option in such installments and over such
period or periods of time, if any, or upon such events, as are determined by the
Committee in its discretion and set forth in the Option Agreement.
 
(d)  Change of Control Provisions.  Each Option Agreement shall state the
applicability of any of the Change of Control provisions set forth in Article
V.  If no statement is made, the Change of Control provisions shall be deemed to
be applicable.
 
The Option shall generally become exercisable, in whole or in part, at the same
time or times as the Shares underlying the Option vest; provided, however, that
the Committee may grant Options that are immediately exercisable in whole or in
part.  Any unvested Shares received by the Option Holder upon early exercise of
the Option in accordance with the preceding sentence shall be subject to the
Company’s right of repurchase, as follows.  Should the Option Holder cease
Service while holding unvested shares, the Company shall have the right (but not
the obligation) to repurchase any or all of those unvested Shares at a price per
share equal to the Option Price (the “Repurchase Rights”).  The Company shall be
entitled to exercise its right to repurchase such unvested Shares by written
notice to the Option Holder sent within 90 days after the time of Option
Holder’s cessation of Service, or (if later) during the 90-day period following
the execution date of any written stock purchase agreement executed by the
Company and the Option Holder.  The notice shall indicate the number of unvested
Shares to be repurchased, the repurchase price to be paid per share (which shall
be a price per share equal to the Option Price) and the date on which the
repurchase is to be effected, such date to be not more than 30 days after the
date of such notice.
 
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(e)  Termination of Services, Death, Disability, Etc.  The Committee may specify
the period, if any, during which an Option may be exercised following
termination of the Option Holder’s Service.  The effect of this
Subsection 7.2(e) shall be limited to determining the consequences of a
termination and nothing in this Subsection 7.2(e) shall restrict or otherwise
interfere with the Company’s discretion with respect to the termination of any
individual’s Service.  If the Committee does not otherwise specify, the
following shall apply:
 
(i) If the Service of the Option Holder is terminated within the Option Period
for Misconduct, the Option shall thereafter be void for all purposes.
 
(ii) If the Option Holder becomes Disabled while still in Service of the Company
or an Affiliate, the Option may be exercised by the Option Holder within one
year following the Option Holder’s termination of Service on account of
Disability (provided that such exercise must occur within the Option Period),
but not thereafter.  In any such case, the Option may be exercised only as to
the Shares that had become vested on or before the date of the Option Holder’s
termination of Service because of Disability.
 
(iii) If the Option Holder dies during the Option Period while still in Service
of the Company or an Affiliate or within the one year period referred to in
(ii) above or the three-month period referred to in (iv) below, the Option may
be exercised by those entitled to do so under the Option Holder’s will or by the
laws of descent and distribution within one year following the Option Holder’s
death (provided that such exercise must occur within the Option Period), but not
thereafter.  In any such case, the Option may be exercised only as to the Shares
that had become vested on or before the date of the Option Holder’s death.
 
(iv) If the Service of the Option Holder is terminated within the Option Period
for any reason other than Misconduct, Disability, or death, the Option may be
exercised by the Option Holder within three months following the date of such
termination (provided that such exercise must occur within the Option Period),
but not thereafter.  In any such case, the Option may be exercised only as to
the Shares that had become vested on or before the date of termination of
Service.
 
(f)  No Employment Right.  Nothing in this paragraph shall limit or impair the
right of the Company or any Affiliate to terminate the employment of any
employee or to terminate the consulting or advisory services of any consultant
or advisor.
 
(g)  Exercise, Payments, Etc.
 
(i)  Manner of Exercise.  The method for exercising each Option granted
hereunder shall be by delivery to the Company of written notice on any business
day, specifying the number of Shares with respect to which such Option is
exercised.  The purchase of such Shares shall take place at the principal
offices of the Company within 30 days following delivery of such notice, at
which time the Option Price of the Shares shall be paid in full by any of the
methods set forth below or a combination thereof.  The Option shall be exercised
when the Option Price for the number of Shares as to which the Option is
exercised is paid to the Company in full.  A properly executed certificate or
certificates representing the Shares shall be delivered to or at the direction
of the Option Holder upon payment therefor.  An Option may be exercised as to
any or all full shares of Stock as to which the Option has become exercisable,
provided however, that an Option may not be exercised at any one time as to
fewer than 100 shares of Stock (or such number of shares of Stock as to which
the Option is then exercisable if such number of shares is less than 100).
 
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(ii) The exercise price shall be paid by any of the following methods or any
combination of the following methods at the election of the Option Holder, or by
any other method approved by the Committee:
 
(A) in cash;
 
(B) by certified check, cashier’s check or other check acceptable to the
Company, payable to the order of the Company;
 
(C) if expressly permitted by a resolution of the Committee applicable to the
Option at or before the time of exercise (whether such resolution is applicable
solely to the Option being exercised or is generally applicable to some or all
Options outstanding under the Plan), by delivery to the Company of certificates
representing the number of Shares then owned by the Option Holder, the Fair
Market Value of which equals the purchase price of the Shares purchased pursuant
to the Option, properly endorsed for transfer to the Company; provided however,
that no Option may be exercised by delivery to the Company of certificates
representing Shares, unless such Shares have been held by the Option Holder for
more than six months (or such other period of time as the Committee determines
is necessary to avoid adverse financial accounting treatment); for purposes of
this Plan, the Fair Market Value of any Shares delivered in payment of the
purchase price upon exercise of the Option shall be the Fair Market Value as of
the exercise date; the exercise date shall be the day of delivery of the
certificates for the Shares used as payment of the Option Price; or
 
(D) through a net exercise pursuant to the formula set forth in Subsection
5.1(d), above unless such net exercise is modified or denied by resolution of
the Committee prior to the grant of the Option.
 
(h)  Date of Grant.  An Option shall be considered as having been granted on the
date specified in the grant resolution of the Committee.
 
(i)  Withholding.
 
(i)  Non-Qualified Options.  Upon exercise of an Option, the Option Holder shall
make appropriate arrangements with the Company to provide for the amount of
additional withholding required by Sections 3102 and 3402 of the Code and
applicable state income tax laws, including payment of such taxes through
delivery of Shares of Stock or by withholding Shares to be issued under the
Option, as provided in ARTICLE XIII.
 
(ii)  Incentive Options.  If an Option Holder makes a disposition (as defined in
Section 424(c) of the Code) of any Shares acquired pursuant to the exercise of
an Incentive Option prior to the expiration of two years from the date on which
the Incentive Option was granted or prior to the expiration of one year from the
date on which the Option was exercised, the Option Holder shall send written
notice to the Company at the Company’s principal place of business of the date
of such disposition, the number of Shares disposed of, the amount of proceeds
received from such disposition and any other information relating to such
disposition as the Company may reasonably request.  The Option Holder shall, in
the event of such a disposition, make appropriate arrangements with the Company
to provide for the amount of additional withholding, if any, required by
Sections 3102 and 3402 of the Code and applicable state income tax laws.
 
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7.3  Restrictions on Incentive Options  
 
                 (a)  $100,000 Per Year Limitation.  The aggregate Fair Market
Value of the Shares with respect to which Incentive Options are exercisable for
the first time by an Option Holder in any calendar year, under the Plan or
otherwise, shall not exceed $100,000 (or such higher amount as may at the time
of grant be applicable under Section 422(d) (or any successor provision) of the
Code).  For this purpose, the Fair Market Value of the Shares shall be
determined as of the date of grant of the Option and Incentive Options shall be
taken into account in the order granted.  The portion of any Incentive Option
accelerated in connection with a Change in Control shall remain exercisable as
an Incentive Option only to the extent the above limitation is not exceeded.  To
the extent such dollar limitation is exceeded, the accelerated portion of such
Incentive Option shall thereafter be exercisable as a Non-Qualified Option.
 
(b)  Ten Percent Stockholders.  Incentive Options granted to an Option Holder
who is the holder of record of 10% or more of the outstanding stock of the
Company shall have an Option Price equal to 110% of the Fair Market Value of the
Shares on the date of grant of the Option and the Option Period for any such
Option shall not exceed five years.
 
7.4  Transferability.
 
(a)  General Rule:  No Lifetime Transfers.  An Option shall not be transferable
by the Option Holder except (i) by will or pursuant to the laws of descent and
distribution or (ii) or to the Option Holder’s former spouse, to the extent such
assignment is pursuant to a Domestic Relations Order (provided that if the
Option being assigned pursuant to a Domestic Relations Order is an Incentive
Option, such Incentive Option shall cease being an Incentive Option, and shall
automatically convert to a Non-Qualified Option, upon such assignment).  Except
as otherwise provided by the terms of a Qualified Domestic Relations Order, an
Option shall be exercisable during the Option Holder’s lifetime only by him or
her, or in the event of Disability or incapacity, by his or her guardian or
legal representative.  The Option Holder’s guardian or legal representative
shall have all of the rights of the Option Holder under this Plan.
 
(b)  No Assignment.  No right or interest of any Option Holder in an Option
granted pursuant to the Plan shall be assignable or transferable during the
lifetime of the Option Holder, either voluntarily or involuntarily, or be
subjected to any lien, directly or indirectly, by operation of law, or
otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy, except as set forth above.  In the event the Option is assigned or
transferred in any manner contrary to terms of this Plan, then all Options
transferred or assigned shall immediately terminate.
 
7.5  Stockholder Privileges    No Option Holder shall have any rights as a
stockholder with respect to any Shares covered by an Option until the Option
Holder becomes the holder of record of such Shares, and no adjustments shall be
made for dividends or other distributions or other rights as to which there is a
record date preceding the date such Option Holder becomes the holder of record
of such Shares, except as provided in ARTICLE IV.
 
ARTICLE VIII
RESTRICTED STOCK AWARDS
 
8.1  Grant of Restricted Stock Awards .  Coincident with or following
designation for participation in the Plan, the Committee may grant a Participant
one or more Restricted Stock Awards consisting of Shares of Stock.  The number
of Shares granted as a Restricted Stock Award shall be determined by the
Committee.  Each Restricted Stock Award granted under the Plan shall be
evidenced by a written restricted stock agreement (a “Restricted Stock
Agreement”).  The Restricted Stock Agreement shall incorporate and conform to
the conditions set forth in this ARTICLE VIII as well as such other terms and
conditions that are not inconsistent as the Committee may consider appropriate
in each case.
 
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8.2  Restrictions .  A Participant’s right to retain a Restricted Stock Award
granted to him or her under Section 8.1 shall be subject to such restrictions,
including but not limited to his or her continuous Service for the Company or an
Affiliate for a restriction period specified by the Committee or the attainment
of specified performance goals and objectives, as may be established by the
Committee with respect to such Award (such restrictions as established by the
Committee shall be known as the “Forfeiture Restrictions”). The Committee may in
its sole discretion provide for different Forfeiture Restrictions or no
Forfeiture Restrictions with respect to different Participants, to different
Restricted Stock Awards or to separate, designated portions of the Shares
constituting a Restricted Stock Award.  The Committee may in its sole discretion
provide for the earlier lapse of any Forfeiture Restrictions in the event of a
Change in Control in accordance with Article V of this Plan.  Unless explicitly
provided for otherwise in an Award Agreement, if a Participant’s Service
terminates for any reason, any Shares as to which the Forfeiture Restrictions
have not been satisfied (or waived or accelerated as provided herein) shall be
forfeited, and all Shares related thereto shall be immediately returned to the
Company.
 
8.3  Privileges of a Stockholder, Transferability.  A Participant shall have all
voting, dividend, liquidation and other rights with respect to Stock in
accordance with its terms received by him or her as a Restricted Stock Award
under this ARTICLE VIII upon his or her becoming the holder of record of such
Stock; provided, however, that the Participant’s right to sell, encumber, or
otherwise transfer such Stock shall be subject to the limitations of
Section 10.2 and ARTICLE XI.
 
8.4  Enforcement of Restrictions.  The Committee shall cause a legend to be
placed on the Stock certificates issued pursuant to each Restricted Stock Award
referring to the restrictions provided by Sections 8.2 and 8.3 and, in addition,
may in its sole discretion require one or more of the following methods of
enforcing the restrictions referred to in Sections 8.2 and 8.3:
 
(a) Requiring the Participant to keep the Stock certificates, duly endorsed, in
the custody of the Company while the restrictions remain in effect; or
 
(b) Requiring that the Stock certificates, duly endorsed, be held in the custody
of a third party while the restrictions remain in effect.
 
ARTICLE IX
OTHER GRANTS
 
From time to time during the duration of this Plan, the Board may, in its sole
discretion, adopt one or more incentive compensation arrangements for
Participants pursuant to which the Participants may acquire Shares, whether by
purchase, outright grant, or otherwise.  Any arrangement shall be subject to the
general provisions of this Plan and all Shares issued pursuant to such
arrangements shall be issued under this Plan.
 
ARTICLE X
RIGHTS OF PARTICIPANTS
 
10.1  Employment or Service.  Nothing contained in the Plan or in any Option, or
other Award granted under the Plan shall confer upon any Participant any right
with respect to the continuation of his employment by, or consulting
relationship with, or Service with the Company or any Affiliate, or interfere in
any way with the right of the Company or any Affiliate, subject to the terms of
any separate employment agreement or other contract to the contrary, at any time
to terminate such employment, consulting relationship or Service or to increase
or decrease the compensation of the Participant from the rate in existence at
the time of the grant of an Award.  Whether an authorized leave of absence, or
absence in military or government service, shall constitute a termination of
Service shall be determined by the Committee at that time.
 
 
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10.2  Nontransferability of Awards.  Except as provided otherwise at the time of
grant or thereafter, or except as otherwise provided in a Domestic Relations
Order, no right or interest of any Participant in a Restricted Stock Award
(prior to the completion of the restriction period applicable thereto), or other
Award (excluding Options) granted pursuant to the Plan, shall be assignable or
transferable during the lifetime of the Participant, either voluntarily or
involuntarily, or subjected to any lien, directly or indirectly, by operation of
law, or otherwise, including execution, levy, garnishment, attachment, pledge or
bankruptcy.  In the event of a Participant’s death, a Participant’s rights and
interests in Options, Restricted Stock Awards, and other Awards, shall, to the
extent provided in ARTICLE VII, ARTICLE VIII, and ARTICLE IX be transferable by
will or the laws of descent and distribution, and payment of any amounts due
under the Plan shall be made to, and exercise of any Options may be made by, the
Participant’s legal representatives, heirs or legatees.  However, a
Participant’s rights and interests in Options, Restricted Stock Awards, and
other Awards shall be transferable to an Option Holder’s former spouse, to the
extent such assignment is pursuant to a Domestic Relations Order (provided that
if the Option being assigned pursuant to a Domestic Relations Order is an
Incentive Option, such Incentive Option shall cease being an Incentive Option,
and shall automatically convert to a Non-Qualified Option, upon such
assignment).  If in the opinion of the Committee a person entitled to payments
or to exercise rights with respect to the Plan is disabled from caring for his
affairs because of mental condition, physical condition or age, payment due such
person may be made to, and such rights shall be exercised by, such person’s
guardian, conservator or other legal personal representative upon furnishing the
Committee with evidence satisfactory to the Committee of such status.
 
10.3  No Plan Funding  .  Obligations to Participants under the Plan will not be
funded, trusteed, insured or secured in any manner.  The Participants under the
Plan shall have no security interest in any assets of the Company or any
Affiliate, and shall be only general creditors of the Company.
 
ARTICLE XI
GENERAL RESTRICTIONS
 
11.1  Investment Representations.  The Company may require any person to whom an
Option, Restricted Stock Award, or other Award, is granted, as a condition of
exercising such Option, receiving such Restricted Stock Award, or such other
Award to give written assurances in substance and form satisfactory to the
Company and its counsel to the effect that such person is acquiring the Stock
for his own account for investment and not with any present intention of selling
or otherwise distributing the same, and to such other effects as the Company or
its counsel deems necessary or appropriate in order to comply with Federal and
applicable state securities laws.  Legends evidencing such restrictions may be
placed on the Stock certificates.
 
11.2  Compliance with Securities Laws.  Each Option, Restricted Stock Award
grant, or other Award shall be subject to the requirement that, if at any time
counsel to the Company shall determine that the listing, registration or
qualification of the shares subject to such Option, Restricted Stock Award, or
other Award grant upon any securities exchange or under any state or federal
law, or the consent or approval of any governmental or regulatory body, is
necessary as a condition of, or in connection with, the issuance or purchase of
shares thereunder, such Option, Restricted Stock Award or other Award may not be
accepted or exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected or obtained on
conditions acceptable to the Committee.  Nothing herein shall be deemed to
require the Company to apply for or to obtain such listing, registration or
qualification.
 
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11.3  Changes in Accounting or Tax Rules.  Except as provided otherwise at the
time an Award is granted, notwithstanding any other provision of the Plan to the
contrary, if, during the term of the Plan, any changes in the financial or tax
accounting rules applicable to Options, Restricted Stock Awards, or other Awards
shall occur which, in the sole judgment of the Committee, may have a material
adverse effect on the reported earnings, assets or liabilities of the Company,
the Committee shall have the right and power to modify as necessary, any then
outstanding and unexercised Options, outstanding Restricted Stock Awards and
other outstanding Awards as to which the applicable services or other
restrictions have not been satisfied.
 
11.4  Stockholder Agreements.  If the Company has one or more stockholder
agreements in effect at the time of grant or exercise of an Award under the
Plan, then the Committee shall, if the Company is contractually obligated to,
and may, in its discretion, condition the grant or exercise (as applicable) of
any such Award upon execution by the Participant of such stockholder
agreement(s), such that the Participant shall become a party to such stockholder
agreements(s) concurrently with such grant or exercise (as applicable) of any
such Award.
 
11.5  Lock-Up Period.  The Award Agreement may, as determined by the Committee
in its sole discretion, include a provision requiring that, if requested by the
Company or any Affiliate or the representative of the underwriters of Stock (or
other securities) of the Company or any Affiliate, the Participant shall not
directly or indirectly sell, offer to sell, contract to sell, pledge, transfer
or otherwise dispose of, make any short sale of, grant any option for the
purchase or sale of, or enter into any hedging or similar transaction with the
same economic effect as a sale of, any Stock (or other securities) of the
Company or any Affiliate held by such Participant (other than those included for
sale in the registration) for a period specified by the representative of the
underwriters of Stock (or other securities) of the Company or any such Affiliate
not to exceed 180 days following the effective date of a registration statement
of the Company or any Affiliate filed under the Securities Act.  If requested by
the Company or any Affiliate or the representative of the underwriters of Stock
(or other securities) of the Company or any Affiliate, the Participant would be
required to enter into an agreement regarding his or her compliance with this
requirement that will survive the term of the Award Agreement.
 
ARTICLE XII
PLAN AMENDMENT, MODIFICATION AND TERMINATION
 
The Board may at any time or from time to time, with or without prior notice,
amend, modify, suspend or terminate the Plan provided, however, that no
amendment or modification may become effective without approval of the amendment
or modification by the stockholders if stockholder approval is required to
enable the Plan to satisfy any applicable statutory or regulatory requirements,
or if the Company, on the advice of counsel, determines that stockholder
approval is otherwise necessary or desirable.  No amendment, modification or
termination of the Plan shall in any manner adversely affect any Options,
Restricted Stock Awards, or other Award theretofore granted under the Plan,
without the consent of the Participant holding such Options, Restricted Stock
Awards, or other Awards. Notwithstanding the foregoing or anything to the
contrary in this Plan, the Board may amend or modify the terms of the Plan or an
Award Agreement, retroactively or prospectively, as permitted under Section 11.3
(Changes in Accounting or Tax Rules) or Section 14.3 (Section 409A) hereof with
or without the consent of the Participant.
 
 
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ARTICLE XIII
WITHHOLDING
 
13.1  Withholding Requirement.  The Company or any Affiliate, as the case may
be, shall have the right to deduct from payments of any kind otherwise due to a
Participant, or to condition the Company’s obligations to deliver Shares upon
the exercise of any Option, the vesting of any Restricted Stock Award or lapse
of Forfeiture Restrictions or Repurchase Rights, or the grant of Stock upon the
payment by the Participant of, any federal, state, local or foreign taxes of any
kind required by law with respect to the grant or issuance of, or the vesting of
or other lapse of restrictions applicable to, the applicable Award or the Shares
subject to, or issuable upon exercise of, such Award.  At the time of such
grant, issuance, vesting or lapse, the Participant shall pay to the Company or
Affiliate, as the case may be, any amount that the Company or Affiliate may
reasonably determine to be necessary to satisfy such withholding obligation.
 
13.2  Withholding With Stock.  At the time the Committee grants an Option,
Restricted Stock Award, other Award, or Stock or at any time thereafter, the
Committee may, in its sole discretion, grant the Participant an election to pay
all such amounts of tax withholding, or any part thereof, by electing (a) to
have the Company withhold from shares otherwise issuable to the Participant,
shares of Stock having a value equal to the amount required to be withheld or
such lesser amount as may be elected by the Participant; provided however, that
the amount of Stock so withheld shall not exceed the minimum amount required to
be withheld under the method of withholding that results in the smallest amount
of withholding, or (b) to transfer to the Company a number of shares of Stock
that were acquired by the Participant more than six months prior to the transfer
to the Company and that have a value equal to the amount required to be withheld
or such lesser amount as may be elected by the Participant.  All elections shall
be subject to the approval or disapproval of the Committee.  The value of shares
of Stock to be withheld shall be based on the Fair Market Value of the Stock on
the date that the amount of tax to be withheld is to be determined (the “Tax
Date”).  Any such elections by Participants to have shares of Stock withheld for
this purpose will be subject to the following restrictions:
 
(a) All elections must be made prior to the Tax Date.
 
(b) All elections shall be irrevocable.
 
(c) If the Participant is an officer or director of the Company within the
meaning of and is subject to Section 16 of the Exchange Act (“Section 16”), the
Participant must satisfy the requirements of such Section 16 and any applicable
Rules thereunder with respect to the use of Stock to satisfy such tax
withholding obligation.
 
ARTICLE XIV
REQUIREMENTS OF LAW
 
14.1  Requirements of Law.  The issuance of Stock and the payment of cash
pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
 
14.2  Federal Securities Law Requirements.  If a Participant is an officer or
director of the Company within the meaning of and subject to Section 16, Awards
granted hereunder shall be subject to the reporting requirements under Section
16(a) (which is the obligation of the Participant) as well as all conditions
required under Rule 16b-3, or any successor rule promulgated under the Exchange
Act, to qualify the Award for any exception from the provisions of Section 16(b)
of the Exchange Act available under that Rule.  Such conditions shall be set
forth in the agreement with the Participant which describes the Award or other
document evidencing or accompanying the Award.
 
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14.3  Section 409A.  Notwithstanding anything in this Plan to the contrary, the
Plan and Awards made under the Plan are intended to comply with the requirements
imposed by Section 409A of the Code.  If any Plan provision or Award would
result in the imposition of an additional tax under Section 409A of the Code,
the Company and the Participant intend that the Plan provision or Award will be
reformed to avoid imposition, to the extent possible, of the applicable tax and
no action taken to comply with Section 409A of the Code shall be deemed to
adversely affect the Participant’s rights to an Award.  The Participant further
agrees that the Committee, in the exercise of its sole discretion and without
the consent of the Participant, may amend or modify an Award in any manner and
delay the payment of any amounts payable pursuant to an Award to the minimum
extent necessary to meet the requirements of Section 409A of the Code as the
Committee deems appropriate or desirable.
 
14.4  Participant’s Representations.  By accepting an Award hereunder, each
Participant acknowledges that the Company has advised such Participant to
discuss the grant of such Award with the Participant’s tax, legal, investment,
and other advisors as the Participant and such advisors determine to be
appropriate, and that such consultation shall include (to the extent determined
by the Participant and such advisors to be appropriate or necessary) a
discussion of the advisability of making an election under Section 83 of the
Code.
 
14.5  Governing Law.  The Plan and all agreements hereunder shall be construed
in accordance with and governed by the laws of the State of Colorado excluding
its conflict of laws rules.
 
ARTICLE XV
DURATION OF THE PLAN
 
Unless sooner terminated by the Board of Directors, the Plan shall terminate at
the close of business on the day immediately following the tenth anniversary of
the Effective Date and no Option, Restricted Stock Award, other Award or Stock
shall be granted, or offer to purchase Stock made, after such
termination.  Options, Restricted Stock Awards, and other Awards outstanding at
the time of the Plan termination may continue to vest, be exercised, or
otherwise become free of restrictions, or be paid, in accordance with their
terms.
 
ARTICLE XVI
EFFECTIVENESS OF THE PLAN
 
This Plan will not be effective, and no Award granted hereunder will be
effective, exercisable, or vest until after this Plan is approved by at least a
majority of the shareholders of the Company voting at a meeting at which a
quorum is present, which approval must occur, if at all, within one year of the
date this Plan is adopted by the Board of Directors.  If the shareholders do not
approve this Plan within such time period, this Plan and all Awards made
hereunder will terminate and be considered void ab initio.
 
Dated as of the Effective Date:
 
GOLDEN EAGLE INTERNATIONAL, INC.
 
a Colorado corporation
 
By:                                                                           
Terry C. Turner, President

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