Exhibit 10.2
 
MARATHON PATENT GROUP, INC.
2014 EQUITY INCENTIVE PLAN
 
1.           Purpose of the Plan.
 
This  2014 Equity Incentive Plan (the “Plan”) is intended as an incentive, to
retain in the employ of and as directors, officers, consultants, advisors and
employees to Marathon Patent Group, Inc., a Nevada corporation (the “Company”),
and any Subsidiary of the Company, within the meaning of Section 424(f) of the
United States Internal Revenue Code of 1986, as amended (the “Code”), persons of
training, experience and ability, to attract new directors, officers,
consultants, advisors and employees whose services are considered valuable, to
encourage the sense of proprietorship and to stimulate the active interest of
such persons in the development and financial success of the Company and its
Subsidiaries.
 
It is further intended that certain options granted pursuant to the Plan shall
constitute incentive stock options within the meaning of Section 422 of the Code
(the “Incentive Options”) while certain other options granted pursuant to the
Plan shall be nonqualified stock options (the “Nonqualified
Options”).  Incentive Options and Nonqualified Options are hereinafter referred
to collectively as “Options.”
 
The Company intends that the Plan meet the requirements of Rule 16b-3 (“Rule
16b-3”) promulgated under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and that transactions of the type specified in subparagraphs
(c) to (f) inclusive of Rule 16b-3 by officers and directors of the Company
pursuant to the Plan will be exempt from the operation of Section 16(b) of the
Exchange Act.  Further, the Plan is intended to satisfy the performance-based
compensation exception to the limitation on the Company’s tax deductions imposed
by Section 162(m) of the Code with respect to those Options for which
qualification for such exception is intended.  In all cases, the terms,
provisions, conditions and limitations of the Plan shall be construed and
interpreted consistent with the Company’s intent as stated in this Section 1.
 
2.           Administration of the Plan.
 
The Board of Directors of the Company (the “Board”) shall appoint and maintain
as administrator of the Plan a Committee (the “Committee”) consisting of two or
more directors who are (i) “Independent Directors” (as such term is defined
under the rules of the NASDAQ Stock Market), (ii) “Non-Employee Directors” (as
such term is defined in Rule 16b-3) and (iii) “Outside Directors” (as such term
is defined in Section 162(m) of the Code), which shall serve at the pleasure of
the Board.  The Committee, subject to Sections 3, 5 and 6 hereof, shall have
full power and authority to designate recipients of Options and restricted stock
(“Restricted Stock”) and to determine the terms and conditions of the respective
Option and Restricted Stock agreements (which need not be identical) and to
interpret the provisions and supervise the administration of the Plan.  The
Committee shall have the authority, without limitation, to designate which
Options granted under the Plan shall be Incentive Options and which shall be
Nonqualified Options.  To the extent any Option does not qualify as an Incentive
Option, it shall constitute a separate Nonqualified Option. In lieu of grants of
Options and Restricted Stock, to the extent that the Committee shall determine
that the issuance of Options or Restricted Stock  to a Participant (as defined
below) could cause the beneficial ownership by such Participant or its
affiliates to exceed  more than 9.99% of the total outstanding shares of Common
Stock of the Company upon the exercise of the Option or the vesting of the
Restricted Stock, as applicable, the Committee shall also have the full power
and authority under the Plan to designate Participants to receive shares of the
Company’s  convertible preferred stock in either a series of
convertible  preferred  that has  already been authorized and designated by the
Board or in a new series of convertible  preferred  that shall be  authorized
and designated by the Board in accordance with the Company’s Amended and
Restated Articles of Incorporation (the “Preferred Stock”). The Committee shall
determine the terms and conditions of the issuance of any Preferred Stock issued
pursuant to the Plan (which terms and conditions may include standard equity
blockers, conditions to issuance and the conversion price of the Preferred
Stock) and any related agreements (which need not be identical) with respect to
the issuance of the Preferred Stock and to interpret the provisions and
supervise the administration of the Plan with respect to the issuance of any
Preferred Stock.
 
 
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Subject to the provisions of the Plan, the Committee shall interpret the Plan
and all Options, Restricted Stock and Preferred Stock (collectively, the
“Securities”)  granted under the Plan, shall make such rules as it deems
necessary for the proper administration of the Plan, shall make all other
determinations necessary or advisable for the administration of the Plan and
shall correct any defects or supply any omission or reconcile any inconsistency
in the Plan or in any  Securities granted under the Plan in the manner and to
the extent that the Committee deems desirable to carry into effect the Plan or
any Securities.  The act or determination of a majority of the Committee shall
be the act or determination of the Committee and any decision reduced to writing
and signed by all of the members of the Committee shall be fully effective as if
it had been made by a majority of the Committee at a meeting duly held for such
purpose.  Subject to the provisions of the Plan, any action taken or
determination made by the Committee pursuant to this and the other Sections of
the Plan shall be conclusive on all parties.
 
In the event that for any reason the Committee is unable to act or if the
Committee at the time of any grant, award or other acquisition under the Plan
does not consist of two or more Non-Employee Directors, or if there shall be no
such Committee, or if the Board otherwise determines to administer the Plan,
then the Plan shall be administered by the Board, and references herein to the
Committee (except in the proviso to this sentence) shall be deemed to be
references to the Board, and any such grant, award or other acquisition may be
approved or ratified in any other manner contemplated by subparagraph (d) of
Rule 16b-3; provided, however, that grants to the Company’s Chief Executive
Officer or to any of the Company’s other four most highly compensated officers
that are intended to qualify as performance-based compensation under Section
162(m) of the Code may only be granted by the Committee.
 
3.           Designation of Optionees and Grantees.
 
The persons eligible for participation in the Plan as recipients of Options (the
“Optionees”) or Restricted Stock (the “Grantees” and together with Optionees,
the “Participants”) shall include directors, officers and employees of, and
consultants and advisors to, the Company or any Subsidiary; provided that
Incentive Options may only be granted to employees of the Company and any
Subsidiary. In selecting Participants, and in determining the number of shares
to be covered by each Option or award of Restricted Stock granted to
Participants, the Committee may consider any factors it deems relevant,
including, without limitation, the office or position held by the Participant or
the Participant’s relationship to the Company, the Participant’s degree of
responsibility for and contribution to the growth and success of the Company or
any Subsidiary, the Participant’s length of service, promotions and potential. A
Participant who has been granted an Option or Restricted Stock hereunder may be
granted an additional Option or Options, or Restricted Stock if the Committee
shall so determine.
 
4.           Stock Reserved for the Plan.
 
Subject to adjustment as provided in Section 8 hereof, a total of 1,500,000
shares of the Company’s common stock, par value $0.0001 per share (the “Common
Stock”), shall be subject to the Plan.  The shares of Common Stock subject to
the Plan shall consist of unissued shares, treasury shares or previously issued
shares held by any Subsidiary of the Company, and such number of shares of
Common Stock shall be and is hereby reserved for such purpose.  Any of such
shares of Common Stock that may remain unissued and that are not subject to
outstanding Options or Preferred Stock at the termination of the Plan shall
cease to be reserved for the purposes of the Plan, but until termination of the
Plan the Company shall at all times reserve a sufficient number of shares of
Common Stock to meet the requirements of the Plan.  Should any Securities expire
or be canceled prior to its exercise, satisfaction of conditions or vesting in
full, as applicable,  or should the number of shares of Common Stock to be
delivered upon the exercise or vesting in full of an Option or award of
Restricted Stock or conversion of Preferred Stock be reduced for any reason, the
shares of Common Stock theretofore subject to such Option or Restricted Stock or
Preferred Stock, as applicable,  may be subject to future Options or Restricted
Stock or Preferred Stock under the Plan, except where such reissuance is
inconsistent with the provisions of Section 162(m) of the Code where
qualification as performance-based compensation under Section 162(m) of the Code
is intended.
 
5.           Terms and Conditions of Options.
 
Options granted under the Plan shall be subject to the following conditions and
shall contain such additional terms and conditions, not inconsistent with the
terms of the Plan, as the Committee shall deem desirable:
 
 
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(a)           Option Price.  The purchase price of each share of Common Stock
purchasable under an Incentive Option shall be determined by the Committee at
the time of grant, but shall not be less than 100% of the Fair Market Value (as
defined below) of such share of Common Stock on the date the Option is granted;
provided, however, that with respect to an Optionee who, at the time such
Incentive Option is granted, owns (within the meaning of Section 424(d) of the
Code) more than 10% of the total combined voting power of all classes of stock
of the Company or of any Subsidiary, the purchase price per share of Common
Stock shall be at least 110% of the Fair Market Value per share of Common Stock
on the date of grant.  The purchase price of each share of Common Stock
purchasable under a Nonqualified Option shall not be less than 100% of the Fair
Market Value of such share of Common Stock on the date the Option is
granted.  The exercise price for each Option shall be subject to adjustment as
provided in Section 8 below.  “Fair Market Value” means the closing price on the
final trading day immediately prior to the grant date of the Common Stock on the
NASDAQ Capital Market LLC or other principal securities exchange or OTC Bulletin
Board on which shares of Common Stock are listed (if the shares of Common Stock
are so listed), , or, if not so listed, the mean between the closing bid and
asked prices of publicly traded shares of Common Stock in the over the counter
market, or, if such bid and asked prices shall not be available, as reported by
any nationally recognized quotation service selected by the Company, or as
determined by the Committee in a manner consistent with the provisions of the
Code.  Anything in this Section 5(a) to the contrary notwithstanding, in no
event shall the purchase price of a share of Common Stock be less than the
minimum price permitted under the rules and policies of any national securities
exchange on which the shares of Common Stock are listed.
 
(b)           Option Term.  The term of each Option shall be fixed by the
Committee, but no Option shall be exercisable more than ten years after the date
such Option is granted and in the case of an Incentive Option granted to an
Optionee who, at the time such Incentive Option is granted, owns (within the
meaning of Section 424(d) of the Code) more than 10% of the total combined
voting power of all classes of stock of the Company or of any Subsidiary, no
such Incentive Option shall be exercisable more than five years after the date
such Incentive Option is granted.
 
(c)           Exercisability.  Subject to Section 5(j) hereof, Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee at the time of grant; provided, however,
that in the absence of any Option vesting periods designated by the Committee at
the time of grant, Options shall vest and become exercisable as to one-third of
the total number of shares subject to the Option on each of the first, second
and third anniversaries of the date of grant; and provided further that no
Options shall be exercisable until such time as any vesting limitation required
by Section 16 of the Exchange Act, and related rules, shall be satisfied if such
limitation shall be required for continued validity of the exemption provided
under Rule 16b-3(d)(3).
 
Upon the occurrence of a “Change in Control” (as hereinafter defined), the
Committee may accelerate the vesting and exercisability of outstanding Options,
in whole or in part, as determined by the Committee in its sole discretion.  In
its sole discretion, the Committee may also determine that, upon the occurrence
of a Change in Control, each outstanding Option shall terminate within a
specified number of days after notice to the Optionee thereunder, and each such
Optionee shall receive, with respect to each share of Common Stock subject to
such Option, an amount equal to the excess of the Fair Market Value of such
shares immediately prior to such Change in Control over the exercise price per
share of such Option; such amount shall be payable in cash, in one or more kinds
of property (including the property, if any, payable in the transaction) or a
combination thereof, as the Committee shall determine in its sole discretion.
 
For purposes of the Plan, unless otherwise defined in an employment agreement
between the Company and the relevant Optionee, a Change in Control shall be
deemed to have occurred if:
 
(i)           a tender offer (or series of related offers) shall be made and
consummated for the ownership of 50% or more of the outstanding voting
securities of the Company, unless as a result of such tender offer more than 50%
of the outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the stockholders of the Company (as of the
time immediately prior to the commencement of such offer), any employee benefit
plan of the Company or its Subsidiaries, and their affiliates;
 
 
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(ii)           the Company shall be merged or consolidated with another
corporation, unless as a result of such merger or consolidation more than 50% of
the outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the stockholders of the Company (as of the
time immediately prior to such transaction), any employee benefit plan of the
Company or its Subsidiaries, and their affiliates;
 
(iii)           the Company shall sell substantially all of its assets to
another corporation that is not wholly owned by the Company, unless as a result
of such sale more than 50% of such assets shall be owned in the aggregate by the
stockholders of the Company (as of the time immediately prior to such
transaction), any employee benefit plan of the Company or its Subsidiaries and
their affiliates; or
 
(iv)           a Person (as defined below) shall acquire 50% or more of the
outstanding voting securities of the Company (whether directly, indirectly,
beneficially or of record), unless as a result of such acquisition more than 50%
of the outstanding voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the stockholders of the Company (as of the
time immediately prior to the first acquisition of such securities by such
Person), any employee benefit plan of the Company or its Subsidiaries, and their
affiliates.
 
Notwithstanding the foregoing, if Change of Control is defined in an employment
agreement between the Company and the relevant Optionee, then, with respect to
such Optionee, Change of Control shall have the meaning ascribed to it in such
employment agreement.
 
For purposes of this Section 5(c), ownership of voting securities shall take
into account and shall include ownership as determined by applying the
provisions of Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the
Exchange Act.  In addition, for such purposes, “Person” shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof; provided, however, that a Person shall not include (A)
the Company or any of its Subsidiaries; (B) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
Subsidiaries; (C) an underwriter temporarily holding securities pursuant to an
offering of such securities; or (D) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same proportion as their
ownership of stock of the Company.
 
(d)           Method of Exercise.  Options to the extent then exercisable may be
exercised in whole or in part at any time during the option period, by giving
written notice to the Company specifying the number of shares of Common Stock to
be purchased, accompanied by payment in full of the purchase price, in cash, or
by check or such other instrument as may be acceptable to the Committee.  As
determined by the Committee, in its sole discretion, at or after grant, payment
in full or in part may be made at the election of the Optionee (i) in the form
of Common Stock owned by the Optionee (based on the Fair Market Value of the
Common Stock which is not the subject of any pledge or security interest, (ii)
in the form of shares of Common Stock or Preferred Stock withheld by the Company
from the shares of Common Stock otherwise to be received with such withheld
shares of Common Stock having a Fair Market Value equal to the exercise price of
the Option, or (iii) by a combination of the foregoing, such Fair Market Value
determined by applying the principles set forth in Section 5(a), provided that
the combined value of all cash and cash equivalents and the Fair Market Value of
any shares surrendered to the Company is at least equal to such exercise price
and except with respect to (ii) above, such method of payment will not cause a
disqualifying disposition of all or a portion of the Common Stock received upon
exercise of an Incentive Option.  An Optionee shall have the right to dividends
and other rights of a stockholder with respect to shares of Common Stock
purchased upon exercise of an Option at such time as the Optionee (i) has given
written notice of exercise and has paid in full for such shares, and (ii) has
satisfied such conditions that may be imposed by the Company with respect to the
withholding of taxes.
 
(e)           Non-transferability of Options.  Options are not transferable and
may be exercised solely by the Optionee during his lifetime or after his death
by the person or persons entitled thereto under his will or the laws of descent
and distribution.  The Committee, in its sole discretion, may permit a transfer
of a Nonqualified Option to (i) a trust for the benefit of the Optionee, (ii) a
member of the Optionee’s immediate family (or a trust for his or her benefit) or
(iii) pursuant to a domestic relations order.  Any attempt to transfer, assign,
pledge or otherwise dispose of, or to subject to execution, attachment or
similar process, any Option contrary to the provisions hereof shall be void and
ineffective and shall give no right to the purported transferee.
 
 
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(f)           Termination by Death.  Unless otherwise determined by the
Committee, if any Optionee’s employment with or service to the Company or any
Subsidiary terminates by reason of death, the Option may thereafter be
exercised, to the extent then exercisable (or on such accelerated basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the Optionee under the will of the Optionee, for a
period of one (1) year after the date of such death (or, if later, such time as
the Option may be exercised pursuant to Section 14(d) hereof) or until the
expiration of the stated term of such Option as provided under the Plan,
whichever period is shorter.
 
(g)           Termination by Reason of Disability.  Unless otherwise determined
by the Committee, if any Optionee’s employment with or service to the Company or
any Subsidiary terminates by reason of Disability (as defined below), then any
Option held by such Optionee may thereafter be exercised, to the extent it was
exercisable at the time of termination due to Disability (or on such accelerated
basis as the Committee shall determine at or after grant), but may not be
exercised after ninety (90) days after the date of such termination of
employment or service (or, if later, such time as the Option may be exercised
pursuant to Section 14(d) hereof) or the expiration of the stated term of such
Option, whichever period is shorter; provided, however, that, if the Optionee
dies within such ninety (90) day period, any unexercised Option held by such
Optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of one (1) year after the date of
such death (or, if later, such time as the Option may be exercised pursuant to
Section 14(d) hereof) or for the stated term of such Option, whichever period is
shorter.  “Disability” shall mean an Optionee’s total and permanent disability;
provided, that if Disability is defined in an employment agreement between the
Company and the relevant Optionee, then, with respect to such Optionee,
Disability shall have the meaning ascribed to it in such employment agreement
 
(h)           Termination by Reason of Retirement.  Unless otherwise determined
by the Committee, if any Optionee’s employment with or service to the Company or
any Subsidiary terminates by reason of Normal or Early Retirement (as such terms
are defined below), any Option held by such Optionee may thereafter be exercised
to the extent it was exercisable at the time of such Retirement (or on such
accelerated basis as the Committee shall determine at or after grant), but may
not be exercised after ninety (90) days after the date of such termination of
employment or service (or, if later, such time as the Option may be exercised
pursuant to Section 14(d) hereof) or the expiration of the stated term of such
Option, whichever date is earlier; provided, however, that, if the Optionee dies
within such ninety (90) day period, any unexercised Option held by such Optionee
shall thereafter be exercisable, to the extent to which it was exercisable at
the time of death, for a period of one (1) year after the date of such death
(or, if later, such time as the Option may be exercised pursuant to Section
14(d) hereof) or for the stated term of such Option, whichever period is
shorter.
 
For purposes of this paragraph (h), “Normal Retirement” shall mean retirement
from active employment with the Company or any Subsidiary on or after the normal
retirement date specified in the applicable Company or Subsidiary pension plan
or if no such pension plan, age 65, and “Early Retirement” shall mean retirement
from active employment with the Company or any Subsidiary pursuant to the early
retirement provisions of the applicable Company or Subsidiary pension plan or if
no such pension plan, age 55.
 
(i)           Other Terminations.  Unless otherwise determined by the Committee
upon grant, if any Optionee’s employment with or service to the Company or any
Subsidiary is terminated by such Optionee for any reason other than death,
Disability, Normal or Early Retirement or Good Reason (as defined below), the
Option shall thereupon terminate, except that the portion of any Option that was
exercisable on the date of such termination of employment or service may be
exercised for the lesser of ninety (90) days after the date of termination (or,
if later, such time as the Option may be exercised pursuant to Section 14(d)
hereof) or the balance of such Option’s term, which ever period is shorter.  The
transfer of an Optionee from the employ of or service to the Company to the
employ of or service to a Subsidiary, or vice versa, or from one Subsidiary to
another, shall not be deemed to constitute a termination of employment or
service for purposes of the Plan.
 
 
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(i)           In the event that the Optionee’s employment or service with the
Company or any Subsidiary is terminated by the Company or such Subsidiary for
“cause” any unexercised portion of any Option shall immediately terminate in its
entirety.  For purposes hereof, unless otherwise defined in an employment
agreement between the Company and the relevant Optionee, “Cause” shall exist
upon a good-faith determination by the Board, following a hearing before the
Board at which an Optionee was represented by counsel and given an opportunity
to be heard, that such Optionee has been accused of fraud, dishonesty or act
detrimental to the interests of the Company or any Subsidiary of Company or that
such Optionee has been accused of or convicted of an act of willful and material
embezzlement or fraud against the Company or of a felony under any state or
federal statute; provided, however, that it is specifically understood that
“Cause” shall not include any act of commission or omission in the good-faith
exercise of such Optionee’s business judgment as a director, officer or employee
of the Company, as the case may be, or upon the advice of counsel to the
Company.  Notwithstanding the foregoing, if Cause is defined in an employment
agreement between the Company and the relevant Optionee, then, with respect to
such Optionee, Cause shall have the meaning ascribed to it in such employment
agreement.
 
(ii)           In the event that an Optionee is removed as a director, officer
or employee by the Company at any time other than for “Cause” or resigns as a
director, officer or employee for “Good Reason” the Option granted to such
Optionee may be exercised by the Optionee, to the extent the Option was
exercisable on the date such Optionee ceases to be a director, officer or
employee.  Such Option may be exercised at any time within one (1) year after
the date the Optionee ceases to be a director, officer or employee (or, if
later, such time as the Option may be exercised pursuant to Section 14(d)
hereof), or the date on which the Option otherwise expires by its terms; which
ever period is shorter, at which time the Option shall terminate; provided,
however, if the Optionee dies before the Options terminate and are no longer
exercisable, the terms and provisions of Section 5(f) shall control.  For
purposes of this Section 5(i), and unless otherwise defined in an employment
agreement between the Company and the relevant Optionee, Good Reason shall exist
upon the occurrence of the following:
 
 
(A)
the assignment to Optionee of any duties inconsistent with the position in the
Company that Optionee held immediately prior to the assignment;

 
 
(B)
a Change of Control resulting in a significant adverse alteration in the status
or conditions of Optionee’s participation with the Company or other nature of
Optionee’s responsibilities from those in effect prior to such Change of
Control, including any significant alteration in Optionee’s responsibilities
immediately prior to such Change in Control; and

 
 
(C)
the failure by the Company to continue to provide Optionee with benefits
substantially similar to those enjoyed by Optionee prior to such failure.

 
Notwithstanding the foregoing, if Good Reason is defined in an employment
agreement between the Company and the relevant Optionee, then, with respect to
such Optionee, Good Reason shall have the meaning ascribed to it in such
employment agreement.
 
(j)           Limit on Value of Incentive Option.  The aggregate Fair Market
Value, determined as of the date the Incentive Option is granted, of Common
Stock for which Incentive Options are exercisable for the first time by any
Optionee during any calendar year under the Plan (and/or any other stock option
plans of the Company or any Subsidiary) shall not exceed $100,000.
 
6.           Terms and Conditions of Restricted Stock.
 
Restricted Stock may be granted under this Plan aside from, or in association
with, any other award and shall be subject to the following conditions and shall
contain such additional terms and conditions (including provisions relating to
the acceleration of vesting of Restricted Stock upon a Change of Control), not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
 
 
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(a)           Grantee rights.  A Grantee shall have no rights to an award of
Restricted Stock unless and until Grantee accepts the award within the period
prescribed by the Committee and, if the Committee shall deem desirable, makes
payment to the Company in cash, or by check or such other instrument as may be
acceptable to the Committee.  After acceptance and issuance of a certificate or
certificates, as provided for below, the Grantee shall have the rights of a
stockholder with respect to Restricted Stock subject to the non-transferability
and forfeiture restrictions described in Section 6(d) below.
 
(b)           Issuance of Certificates.  The Company shall issue in the
Grantee’s name a certificate or certificates for the shares of Common Stock
associated with the award promptly after the Grantee accepts such award.
 
(c)           Delivery of Certificates.  Unless otherwise provided, any
certificate or certificates issued evidencing shares of Restricted Stock shall
not be delivered to the Grantee until such shares are free of any restrictions
specified by the Committee at the time of grant.
 
(d)           Forfeitability, Non-transferability of Restricted Stock.  Shares
of Restricted Stock are forfeitable until the terms of the Restricted Stock
grant have been satisfied.  Shares of Restricted Stock are not transferable
until the date on which the Committee has specified such restrictions have
lapsed.  Unless otherwise provided by the Committee at or after grant,
distributions in the form of dividends or otherwise of additional shares or
property in respect of shares of Restricted Stock shall be subject to the same
restrictions as such shares of Restricted Stock.
 
(e)           Change of Control.  Upon the occurrence of a Change in Control as
defined in Section 5(c), the Committee may accelerate the vesting of outstanding
Restricted Stock, in whole or in part, as determined by the Committee, in its
sole discretion.
 
(f)           Termination of Employment.  Unless otherwise determined by the
Committee at or after grant, in the event the Grantee ceases to be an employee
or otherwise associated with the Company for any other reason, all shares of
Restricted Stock theretofore awarded to him which are still subject to
restrictions shall be forfeited and the Company shall have the right to complete
the blank stock power.  The Committee may provide (on or after grant) that
restrictions or forfeiture conditions relating to shares of Restricted Stock
will be waived in whole or in part in the event of termination resulting from
specified causes, and the Committee may in other cases waive in whole or in part
restrictions or forfeiture conditions relating to Restricted Stock.
 
6B.           Terms and Conditions of Preferred  Stock.
 
In lieu of grants of Options and Restricted Stock, to the extent that the
Committee shall determine that the issuance of Options or Restricted Stock  to a
Participant could cause the beneficial ownership by such Participant or its
affiliates to exceed  more than 9.99% of the total outstanding shares of Common
Stock of the Company upon the exercise of the Option or the vesting of the
Restricted Stock, as applicable, Preferred Stock may be granted under this Plan
aside from, or in association with, any other award and shall be subject to the
following conditions and shall contain such additional terms and conditions
(including provisions relating to the acceleration of vesting of Restricted
Stock upon a Change of Control), not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
 
(a)           Grantee rights.  A Grantee shall have no rights to an award of
Preferred Stock unless and until all of the following conditions have been
met  (A) the Committee designates an award of Preferred Stock in a series of
Preferred Stock  that has already been authorized and designated the Board, the
Board passes a resolution authorizing and designating a new series of Preferred
Stock on the terms and conditions determined by the Committee, (B) if
applicable, the Company files a Certificate of Designation with the Secretary of
State of the State of Nevada that sets forth the rights, preferences and other
terms of any newly authorized and designated series of the Preferred Stock,
and  (C) Grantee accepts the award within the period prescribed by the Committee
and, if the Committee shall deem desirable, executes an agreement that sets
forth the terms and conditions of the issuance of the  award of Preferred Stock
as may be acceptable to the Committee.  After acceptance and issuance of a
certificate or certificates, as provided for below, the Grantee shall have the
rights set forth in the applicable Certificate of Designation and any related
agreement  with respect to the Preferred Stock award. The Preferred Stock shall
also be subject to the non-transferability and forfeiture restrictions described
in Section 6B(d) below.
 
 
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(b)           Issuance of Certificates.  The Company shall issue in the
Grantee’s name a certificate or certificates for the shares of Preferred Stock
associated with the award promptly after the Grantee accepts such award. The
Company shall issue in the Grantee’s name a certificate or certificates for the
shares of Common Stock underlying the Preferred Stock associated with the award
promptly after the Grantee converts the Preferred Stock in accordance with the
terms and conditions set forth in the applicable Certificate of Designation and
related agreement, if any.
 
(c)           Delivery of Certificates.  Unless otherwise provided, any
certificate or certificates issued evidencing shares of Preferred Stock and/or
the underlying Common Stock issuable upon the conversion of the Preferred Stock
shall not be delivered to the Grantee until such shares are free of any
restrictions specified by the Committee at the time of grant.
 
(d)           Forfeitability, Non-transferability of Preferred Stock.  Shares of
Preferred Stock and any underlying shares of Common Stock issuable upon the
conversion of the Preferred Stock are forfeitable until the terms of the
Preferred  Stock grant have been satisfied.  Shares of Preferred Stock and any
underlying shares of Common Stock issuable upon the conversion of the Preferred
Stock are not transferable until the date on which the Committee has specified
such have lapsed.  Unless otherwise provided by the Committee at or after grant,
distributions in the form of dividends or otherwise of additional shares or
property in respect of shares of  Preferred Stock if the applicable Certificate
of Designation provides for such distributions,  shall be subject to the same
restrictions as such shares of Preferred Stock.
 
(e)           Change of Control.  Upon the occurrence of a Change in Control as
defined in Section 5(c), the Committee may waive any conditions and/or
restrictions to the issuance of any contingent award of Preferred Stock, in
whole or in part, as determined by the Committee, in its sole discretion.
 
(f)           Termination of Employment or Consulting Agreement.  Unless
otherwise determined by the Committee at or after grant, in the event the
Grantee ceases to be, as applicable, an employee, a consultant or otherwise
associated with the Company for any other reason, all shares of Preferred Stock
theretofore awarded to him which are still subject to restrictions shall be
forfeited and the Company shall have the right to complete the blank stock
power.  The Committee may provide (on or after grant) that restrictions or
forfeiture conditions relating to shares of Preferred Stock will be waived in
whole or in part in the event of termination resulting from specified causes,
and the Committee may in other cases waive in whole or in part restrictions or
forfeiture conditions relating to Preferred  Stock.
 
 
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(g)           Maximum Percentage.  Notwithstanding anything to the contrary set
forth herein, the Company shall not effect any conversion of Preferred Stock
issued under the Plan, and no Participant shall have the right to convert any
Preferred Stock, to the extent that after giving effect to such conversion, the
beneficial owner of such shares (together with such Participant's affiliates)
would have acquired, through conversion of such Preferred Stock or otherwise,
beneficial ownership of a number of shares of Common Stock that exceeds 9.99%
(the "Maximum Percentage") of the number of shares of Common Stock outstanding
immediately after giving effect to such conversion.  The Company shall not give
effect to any voting rights of such Preferred Stock, and any Participant shall
not have the right to exercise voting rights with respect to any Preferred Stock
pursuant hereto, to the extent that giving effect to such voting rights would
result in such Participant (together with its affiliates) being deemed to
beneficially own in excess of the Maximum Percentage of the number of shares of
Common Stock outstanding immediately after giving effect to such exercise,
assuming such exercise as being equivalent to conversion.  For purposes of the
foregoing, the number of shares of Common Stock beneficially owned by a
Participant and its affiliates shall include the number of shares of Common
Stock issuable upon conversion of the Preferred Stock with respect to which the
determination of such sentence is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (A) conversion of the
remaining, nonconverted shares of Preferred Stock beneficially owned by such
Participant or any of its affiliates and (B) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
(including, without limitation, any notes or warrants) subject to a limitation
on conversion or exercise analogous to the limitation contained in this Section
6B(g) beneficially owned by such Participant or any of its affiliates.  Except
as set forth in the preceding sentence, for purposes of this Section 6B(g),
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended.  For purposes of this Section
6B(g), in determining the number of outstanding shares of Common Stock, a
Participant may rely on the number of outstanding shares of Common Stock as
reflected in (1) the Company's most recent Form 10-K, Form 10-Q, or Form 8-K, as
the case may be, (2) a more recent public announcement by the Company, or (3)
any other notice by the Company  or its transfer agent setting forth the number
of shares of Common Stock outstanding.  For any reason at any time, upon the
written request of any Participant, the Company shall within one (1) business
day following the receipt of such notice, confirm orally and in writing to any
such Participant the number of shares of Common Stock then outstanding.  In any
case, the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including the Preferred Stock, by such Holder and its affiliates since the date
as of which such number of outstanding shares of Common Stock was reported.  By
written notice to the Company, the Participant may from time to time increase or
decrease the Maximum Percentage to any other percentage not in excess of 9.99%
specified in such notice; provided, that (i) any such increase will not be
effective until the sixty-first (61st) day after such notice is delivered to the
Company, and (ii) any such increase or decrease will apply only to the Holder
providing such written notice and not to any other Holder.  In the event that
the Company cannot pay any portion of any dividend, distribution, grant or
issuance hereunder to a Participant solely by reason of this Section 6B(g) (such
shares, the "Limited Shares"), notwithstanding anything to the contrary
contained herein, the Company shall not be required to pay cash in lieu of the
payment that otherwise would have been made in such Limited Shares, but shall
hold any such Limited Shares in abeyance for such Holder until such time, if
ever, that the delivery of such Limited Shares shall not cause the Participant
to exceed the Maximum Percentage, at which time such Participant shall be
delivered such Limited Shares to the extent as if there had been no such
limitation.  The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section
6B(g) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation.
 
7.           Term of Plan.
 
No  Securities shall be granted pursuant to the Plan on or after the date which
is ten years from the effective date of the Plan, but Options and awards of
Restricted Stock and/or Preferred Stock theretofore granted may extend beyond
that date.
 
 
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8.           Capital Change of the Company.
 
In the event of any merger, reorganization, consolidation, recapitalization,
stock dividend, or other change in corporate structure affecting the Common
Stock of the Company, the Committee shall  make an appropriate and equitable
adjustment in the number and kind of shares reserved for issuance under the Plan
and (A) in the number and option price of shares subject to outstanding Options
granted under the Plan, to the end that after such event each Optionee’s
proportionate interest shall be maintained (to the extent possible) as
immediately before the occurrence of such event and (B) in the number and
conversion price of shares subject to outstanding Preferred Stock  granted under
the Plan, to the end that after such event each Participant’s  (who has received
a grant of Preferred Stock)  proportionate interest shall be maintained (to the
extent possible) as immediately before the occurrence of such event.  The
Committee shall, to the extent feasible, make such other adjustments as may be
required under the tax laws so that any Incentive Options previously granted
shall not be deemed modified within the meaning of Section 424(h) of the
Code.  Appropriate adjustments shall also be made in the case of outstanding
Restricted Stock granted under the Plan.
 
The adjustments described above will be made only to the extent consistent with
continued qualification of the Option under Section 422 of the Code (in the case
of an Incentive Option) and Section 409A of the Code.
 
9.           Purchase for Investment/Conditions.
 
Unless the Options and shares covered by the Plan have been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or the Company has
determined that such registration is unnecessary, each person exercising or
receiving  Securities under the Plan may be required by the Company to give a
representation in writing that he is acquiring the securities for his own
account for investment and not with a view to, or for sale in connection with,
the distribution of any part thereof.  The Committee may impose any additional
or further restrictions on awards of  Securities as shall be determined by the
Committee at the time of award.
 
10.           Taxes.
 
(a)           The Company may make such provisions as it may deem appropriate,
consistent with applicable law, in connection with any  Securities granted under
the Plan with respect to the withholding of any taxes (including income or
employment taxes) or any other tax matters.
 
(b)           If any Grantee, in connection with the acquisition of Restricted
Stock, makes the election permitted under Section 83(b) of the Code (that is, an
election to include in gross income in the year of transfer the amounts
specified in Section 83(b)), such Grantee shall notify the Company of the
election with the Internal Revenue Service pursuant to regulations issued under
the authority of Code Section 83(b).
 
(c)           If any Grantee shall make any disposition of shares of Common
Stock issued pursuant to the exercise of an Incentive Option under the
circumstances described in Section 421(b) of the Code (relating to certain
disqualifying dispositions), such Grantee shall notify the Company of such
disposition within ten (10) days hereof.
 
11.           Effective Date of Plan.
 
The Plan shall be effective on September 16, 2014; provided, however, that the
Plan must subsequently be approved by majority vote of the Company’s
stockholders in accordance with the rules and regulations of the NASDAQ Stock
Market LLC no later than September 16, 2015.
 
 
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12.           Amendment and Termination.
 
The Board may amend, suspend, or terminate the Plan, except that no amendment
shall be made that would impair the rights of any Participant under Securities
theretofore granted without the Participant’s consent, and except that no
amendment shall be made which, without the approval of the stockholders of the
Company would:
 
(a)           materially increase the number of shares that may be issued under
the Plan, except as is provided in Section 8;
 
(b)           materially increase the benefits accruing to the Participants
under the Plan;
 
(c)           materially modify the requirements as to eligibility for
participation in the Plan;
 
(d)           decrease the exercise price of an Incentive Option to less than
100% of the Fair Market Value per share of Common Stock on the date of grant
thereof or the exercise price of a Nonqualified Option to less than 100% of the
Fair Market Value per share of Common Stock on the date of grant thereof;
 
(e)           extend the term of any Option beyond that provided for in Section
5(b);
 
(f)           except as otherwise provided in Sections 5(d) and 8 hereof, reduce
the exercise price of outstanding Options or effect repricing through
cancellations and re-grants of new Options;
 
(g)           increase the number of shares of Common Stock to be issued or
issuable under the Plan to an amount that is equal to or in excess of 19.99% of
the number of shares of Common Stock outstanding before the issuance of the
stock or securities; or
 
(h)           otherwise require stockholder approval  pursuant to the rules and
regulations of the NASDAQ Stock Market LLC.
 
Subject to the forgoing, the Committee may amend the terms of any Option
theretofore granted, prospectively or retrospectively, but no such amendment
shall impair the rights of any Optionee without the Optionee’s consent.
 
It is the intention of the Board that the Plan comply strictly with the
provisions of Section 409A of the Code and Treasury Regulations and other
Internal Revenue Service guidance promulgated thereunder (the “Section 409A
Rules”) and the Committee shall exercise its discretion in granting awards
hereunder (and the terms of such awards), accordingly.  The Plan and any grant
of an award hereunder may be amended from time to time (without, in the case of
an award, the consent of the Participant) as may be necessary or appropriate to
comply with the Section 409A Rules.
 
13.           Government Regulations.
 
The Plan, and the grant and exercise or conversion, as applicable, of Securities
hereunder, and the obligation of the Company to  issue and deliver shares under
such Securities shall be subject to all applicable laws, rules and regulations,
and to such approvals by any governmental agencies, national securities
exchanges and interdealer quotation systems as may be required.
 
14.           General Provisions.
 
(a)           Certificates.  All certificates for shares of Common Stock or
Preferred Stock delivered under the Plan shall be subject to such stop transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations and other requirements of the Securities and Exchange
Commission, or other securities commission having jurisdiction, any applicable
Federal or state securities law, any stock exchange or interdealer quotation
system upon which the Common Stock is then listed or traded and the Committee
may cause a legend or legends to be placed on any such certificates to make
appropriate reference to such restrictions.
 
 
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(b)           Employment Matters.  Neither the adoption of the Plan nor any
grant or award under the Plan shall confer upon any Participant who is an
employee of the Company or any Subsidiary any right to continued employment or,
in the case of a Participant who is a director, continued service as a director,
with the Company or a Subsidiary, as the case may be, nor shall it interfere in
any way with the right of the Company or any Subsidiary to terminate the
employment of any of its employees, the service of any of its directors or the
retention of any of its consultants or advisors at any time.
 
(c)           Limitation of Liability.  No member of the Committee, or any
officer or employee of the Company acting on behalf of the Committee, shall be
personally liable for any action, determination or interpretation taken or made
in good faith with respect to the Plan, and all members of the Committee and
each and any officer or employee of the Company acting on their behalf shall, to
the extent permitted by law, be fully indemnified and protected by the Company
in respect of any such action, determination or interpretation.
 
(d)           Registration of Stock.  Notwithstanding any other provision in the
Plan, no Option may be exercised unless and until the Common Stock to be issued
upon the exercise thereof has been registered under the Securities Act and
applicable state securities laws, or are, in the opinion of counsel to the
Company, exempt from such registration in the United States.  The Company shall
not be under any obligation to register under applicable federal or state
securities laws any Common Stock to be issued upon the exercise of an Option
granted hereunder in order to permit the exercise of an Option and the issuance
and sale of the Common Stock subject to such Option, although the Company may in
its sole discretion register such Common Stock at such time as the Company shall
determine.  If the Company chooses to comply with such an exemption from
registration, the Common Stock issued under the Plan may, at the direction of
the Committee, bear an appropriate restrictive legend restricting the transfer
or pledge of the Common Stock represented thereby, and the Committee may also
give appropriate stop transfer instructions with respect to such Common Stock to
the Company’s transfer agent.
 
15.           Non-Uniform Determinations.
 
The Committee’s determinations under the Plan, including, without limitation,
(i) the determination of the Participants to receive awards, (ii) the form,
amount and timing of such awards, (iii) the terms and provisions of such awards
and (ii) the agreements evidencing the same, need not be uniform and may be made
by it selectively among Participants who receive, or who are eligible to
receive, awards under the Plan, whether or not such Participants are similarly
situated.
 
16.           Governing Law.
 
The validity, construction, and effect of the Plan and any rules and regulations
relating to the Plan shall be determined in accordance with the internal laws of
the State of Nevada, without giving effect to principles of conflicts of laws,
and applicable federal law.
 
17.       Additional Issuance Restrictions.

If the Company has not obtained the approval of its stockholders in accordance
with NASDAQ Listing Rule 5635(d), then the Company may not issue any Securities
under this Plan that would upon the issuance of any Securities or upon the
exercise on conversion of such Securities, as applicable, into shares of the
Company’s Common Stock, when aggregated with any other shares of Common Stock
(i) held by a Participant, (ii) underlying any convertible security held by a
Participant, and (iii) issuable upon prior exercise of  any convertible security
held by a Participant, would exceed 19.99% shares of the Company’s Common Stock,
subject to adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that occur
after the date of the adoption of this Plan (such number of shares, the
“Issuable Maximum”).  The Participant shall be entitled to a portion of the
Issuable Maximum as reasonably determined by the Committee so as not to violate
NASDAQ Listing Rule 5635(d). In addition, the Participant may allocate its
pro-rata portion of the Issuable Maximum among Securities held by it in its sole
discretion. Such portion shall be adjusted upward ratably in the event a
Participant no longer holds any Securities and the amount of shares issued to
such Participant pursuant to its Securities was less than such Participant’s
pro-rata share of the Issuable Maximum.