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Exhibit 10.1

 

 

AMERICAN LITHIUM MINERALS, INC.

2009 STOCK PLAN

1.

Purpose.

The purpose of this plan (the "Plan") is to secure for American Lithium
Minerals, Inc. (the "Corporation") and its stockholders the benefits arising
from capital stock ownership by employees, officers and directors of, and
consultants or advisors to, the Corporation and its subsidiary corporations who
are expected to contribute to the Corporation's future growth and success.  The
Plan permits grants of options to purchase shares of Common Stock, $0.001 par
value per share, of the Corporation (“Common Stock”) and awards of shares of
Common Stock that are restricted as provided in Section 12 (“Restricted
Shares”).  Those provisions of the Plan which make express reference to Section
422 of the Internal Revenue Code of 1986, as amended or replaced from time to
time (the "Code"), shall apply only to Incentive Stock Options (as that term is
defined in the Plan).

2.

Type of Options and Administration.

(a)

Types of Options.  Options granted pursuant to the Plan shall be authorized by
action of the Board of Directors of the Corporation (or a Committee designated
by the Board of Directors) and may be either incentive stock options ("Incentive
Stock Options") meeting the requirements of Section 422 of the Code or
non-statutory options which are not intended to meet the requirements of Section
422 of the Code.

(b)

Administration.  The Plan will be administered by the Board of Directors of the
Corporation, whose construction and interpretation of the terms and provisions
of the Plan shall be final and conclusive.  The Board of Directors may in its
sole discretion grant Restricted Shares and options to purchase shares of Common
Stock and issue shares upon exercise of such options as provided in the Plan.
 The Board shall have authority, subject to the express provisions of the Plan,
to construe the respective option and Restricted Share agreements and the Plan,
to prescribe, amend and rescind rules and regulations relating to the Plan, to
determine the terms and provisions of the respective option and Restricted Share
agreements, which need not be identical, and to make all other determinations in
the judgment of the Board of Directors necessary or desirable for the
administration of the Plan.  The Board of Directors may correct any defect or
supply any omission or reconcile any inconsistency in the Plan or in any option
or Restricted Share agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the sole and final judge
of such expediency.  No director or person acting pursuant to authority
delegated by the Board of Directors shall be liable for any action or
determination under the Plan made in good faith.  The Board of Directors may, to
the full extent permitted by or consistent with applicable laws or regulations
(including, without limitation, applicable state law and Rule 16b-3 promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act"), or any successor
rule ("Rule 16b-3")), delegate any or all of its powers under the Plan to a
committee (the "Committee") appointed by the Board of Directors, and if the
Committee is so appointed all references to the Board of Directors in the Plan
shall mean and relate to such Committee with respect to the powers so delegated.
 Any director to whom an option or stock grant is awarded shall be ineligible to
vote upon his or her option or stock grant, but such option or stock grant may
be awarded any such director by a vote of the remainder of the directors, except
as limited below.

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(c)

Applicability of Rule 16b-3.  Those provisions of the Plan which make express
reference to Rule 16b-3 shall apply to the Corporation only at such time as the
Corporation's Common Stock is registered under the Exchange Act, and then only
to such persons as are required to file reports under Section 16(a) of the
Exchange Act (a "Reporting Person").

(d)

Compliance with Section 162(m) of the Code.  Section 162(m) of the Code, added
by the Omnibus Budget Reconciliation Act of 1993, generally limits the tax
deductibility to publicly held companies of compensation in excess of $1,000,000
paid to certain “covered employees” (“Covered Employees”).  It is the
Corporation’s intention to preserve the deductibility of such compensation to
the extent it is reasonably practicable and to the extent it is consistent with
the Corporation’s compensation objectives.  For purposes of this Plan, Covered
Employees of the Corporation shall be those employees of the Corporation
described in Section 162(m)(3) of the Code.

(e)

Special Provisions Applicable to Options Granted to Covered Employees.  In order
for the full value of options granted to Covered Employees to be deductible by
the Corporation for federal income tax purposes, the Corporation may intend for
such options to be treated as “qualified performance based compensation” as
described in Treas. Reg. §1.162-27(e) (or any successor regulation).  In such
case, options granted to Covered Employees shall be subject to the following
additional requirements:

(i)

such options and rights shall be granted only by a committee comprised solely of
two or more “outside directors”, within the meaning of Treas. Reg. §
1.162.27(e)(3); and

(ii)

the exercise price of such options shall in no event be less than the Fair
Market Value (as defined below) of the Common Stock as of the date of grant of
such options.

(f)

Section 409A of the Code.  The Board of Directors may only grant those awards
that either comply with the applicable requirements of Section 409A of the Code,
or do not result in the deferral of compensation within the meaning of Section
409A of the Code.

3.

Eligibility.

(a)

(a)

General.  Options and Restricted Shares may be granted to persons who are, at
the time of grant, in a Business Relationship (as defined below) with the
Corporation; provided, that Incentive Stock Options may only be granted to
individuals who are employees of the Corporation (within the meaning of Section
3401(c) of the Code).  A person who has been granted an option or Restricted
Shares may, if he or she is otherwise eligible, be granted additional options or
Restricted Shares if the Board of Directors shall so determine.  For purposes of
the Plan, “Business Relationship” means that a person is serving the
Corporation, its parent, if applicable, or any of its subsidiaries, if
applicable, in the capacity of an employee, officer, director, advisor or
consultant.

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(b)

Grant of Options to Reporting Persons.  From and after the registration of the
Common Stock of the Corporation under the Exchange Act, the selection of a
director or an officer who is a Reporting Person (as the terms "director" and
"officer" are defined for purposes of Rule 16b-3) as a recipient of an option or
Restricted Shares, the timing of the option or Restricted Share grant, the
exercise price of the option and the number of Restricted Shares or shares
subject to the option shall be determined either (i) by the Board of Directors,
or (ii) by a committee consisting of two or more "Non-Employee Directors" having
full authority to act in the matter.  For the purposes of the Plan, a director
shall be deemed to be a "Non-Employee Director" only if such person qualifies as
a "Non-Employee Director" within the meaning of Rule 16b-3, as such term is
interpreted from time to time.  

4.

Stock Subject to Plan.

The stock subject to options granted under the Plan or grants of Restricted
Shares shall be shares of authorized but unissued or reacquired Common Stock.
 Subject to adjustment as provided in Section 16 below, the maximum number of
shares of Common Stock of the Corporation (“Shares”) which may be issued and
sold under the Plan is five million Shares.  If any Restricted Shares shall be
reacquired by the Corporation, forfeited or an option granted under the Plan
shall expire, terminate or is canceled for any reason without having been
exercised in full, the forfeited Restricted Shares or unpurchased Shares subject
to such option shall again be available for subsequent option or Restricted
Share grants under the Plan. Subject to adjustment in accordance with Section
16:

(a)

No more than an aggregate of 4,000,000 Shares may be issued under Stock Options
during the term of the Plan;

(b)

No Shares may be issued in the form of Restricted Shares during the term of the
Plan; and

(c)  

The maximum number of Shares with respect to which options may be granted to any
one person during any fiscal year of the Corporation may not exceed 5% of the
Corporation’s issued and outstanding shares at the time of grant.

These limits shall be applied and construed consistently with Section 162(m) of
the Code.

5.

Forms of Option and Restricted Share Agreements.

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As a condition to the grant of Restricted Shares or an option under the Plan,
each recipient of Restricted Shares or an option shall execute an option or
Restricted Share or Stock Option agreement in such form not inconsistent with
the Plan as may be approved by the Board of Directors.  Such Option or
Restricted Share agreements may differ among recipients.

 

6.

Purchase Price.

(a)

General.  The purchase price per Share deliverable upon the exercise of an
option shall be determined by the Board of Directors at the time of grant of
such option; provided, however, that the exercise price of an option shall not
be less than 100% of the Fair Market Value (as hereinafter defined) of a Share,
at the time of grant of such option, or not less than 110% of such Fair Market
Value in the case of an Incentive Stock Option described in Section 11(b).
 "Fair Market Value" of a Share as of a specified date for the purposes of the
Plan shall mean the closing price of a Share on the principal securities
exchange on which such Shares are traded on the day immediately preceding the
date as of which Fair Market Value is being determined, or on the next preceding
date on which such Shares are traded if no shares were traded on such
immediately preceding day, or if the Shares are not traded on a securities
exchange, Fair Market Value shall be deemed to be the average of the high bid
and low asked prices of the Shares in the over-the-counter market on the day
immediately preceding the date as of which Fair Market Value is being determined
or on the next preceding date on which such high bid and low asked prices were
recorded.  In no case shall Fair Market Value be determined with regard to
restrictions other than restrictions which, by their terms, will never lapse.
 The Board of Directors may also permit optionees, either on a selective or
aggregate basis, to simultaneously exercise options and sell the Shares thereby
acquired, pursuant to a brokerage or similar arrangement, approved in advance by
the Board of Directors, and to use the proceeds from such sale as payment of the
purchase price of such shares.

(b)

Payment of Purchase Price.  Options granted under the Plan may provide for the
payment of the exercise price by delivery of cash or a check to the order of the
Corporation in an amount equal to the exercise price of such options, or, to the
extent provided in the applicable option agreement, (i) by delivery to the
Corporation of Shares having a Fair Market Value on the date of exercise equal
in amount to the exercise price of the options being exercised, (ii) through any
cashless exercise feature that may be included in the option agreement covering
a particular option grant, (iii) by any other means  which the Board of
Directors determines are consistent with the purpose of the Plan and with
applicable laws and regulations (including, without limitation, the provisions
of Rule 16b-3 and Regulation T promulgated by the Federal Reserve Board) or (iv)
by any combination of such methods of payment.

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7.

Option Period.

Subject to earlier termination as provided in the Plan, each option and all
rights thereunder shall expire on such date as determined by the Board of
Directors and set forth in the applicable option agreement, provided, that such
date shall not be later than (10) ten years after the date on which the option
is granted.

 

8.

Exercise of Options.

Each option granted under the Plan shall be exercisable either in full or in
installments at such time or times and during such period as shall be set forth
in the option agreement evidencing such option, subject to the provisions of the
Plan.  No option granted to a Reporting Person for purposes of the Exchange Act,
however, shall be exercisable during the first six months after the date of
grant.  Subject to the requirements in the immediately preceding sentence, if an
option is not at the time of grant immediately exercisable, the Board of
Directors may (i) in the agreement evidencing such option, provide for the
acceleration of the exercise date or dates of the subject option upon the
occurrence of specified events, and/or (ii) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such option,
unless it would cause an option that otherwise qualified as an Incentive Stock
Option to lose Incentive Stock Option treatment by application of Section
422(d)(1) of the Code and Section 11(c) of the Plan.

9.

Non-transferability of Options.

No option granted under this Plan shall be assignable or otherwise transferable
by the optionee except by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined in the Code or Title
I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
or the rules thereunder.  An option may be exercised during the lifetime of the
optionee only by the optionee.  In the event an optionee dies during his
employment by the Corporation or any of its subsidiaries, or during the
three-month period following the date of termination of such employment, his
option shall thereafter be exercisable, during the period specified to the full
extent to which such option was exercisable by the optionee at the time of his
death during the periods set forth in Section 10 or 11(d).  If any optionee
should attempt to dispose of or encumber his or her options, other than in
accordance with the applicable terms of this Plan or the applicable option
agreement, his or her interest in such options shall terminate.

10.

Effect of Termination of Employment or Other Relationship.

Except as provided in Section 11(d) with respect to Incentive Stock Options, and
subject to the provisions of the Plan and the applicable option agreement, an
optionee may exercise an option (but only to the extent such option was
exercisable at the time of termination of the optionee’s employment or other
relationship with the Corporation) at any time within three (3) months following
the termination of the optionee's employment or other relationship with the
Corporation or within one (1) year if such termination was due to the death or
disability of the optionee, but, except in the case of the optionee's death, in
no event later than the expiration date of the Option.  If the termination of
the optionee's employment is for cause or is otherwise attributable to a breach
by the optionee of an employment or confidentiality or non-disclosure agreement,
the option shall expire immediately upon such termination.  The Board of
Directors shall have the power to determine what constitutes a termination for
cause or a breach of an employment or confidentiality or non-disclosure
agreement, whether an optionee has been terminated for cause or has breached
such an agreement, and the date upon which such termination for cause or breach
occurs.  Any such determinations shall be final and conclusive and binding upon
the optionee.  

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11.

Incentive Stock Options.

Options granted under the Plan which are intended to be Incentive Stock Options
shall be subject to the following additional terms and conditions:

(a)

Express Designation.  All Incentive Stock Options granted under the Plan shall,
at the time of grant, be specifically designated as such in the option agreement
covering such Incentive Stock Options.

(b)

10% Stockholder.  If any employee to whom an Incentive Stock Option is to be
granted under the Plan is, at the time of the grant of such option, the owner of
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Corporation (after taking into account the attribution of stock
ownership rules of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:

(i)

The purchase price per share of the Common Stock subject to such Incentive Stock
Option shall not be less than 110% of the Fair Market Value of one share of
Common Stock at the time of grant; and

(ii)

the option exercise period shall not exceed five years from the date of grant.

(c)

Dollar Limitation.  For so long as the Code shall so provide, options granted to
any employee under the Plan (and any other incentive stock option plans of the
Corporation) which are intended to constitute Incentive Stock Options shall not
constitute Incentive Stock Options to the extent that such options, in the
aggregate, become exercisable for the first time in any one calendar year for
shares of Common Stock with an aggregate Fair Market Value, as of the respective
date or dates of grant, of more than $100,000 (or such other limitations as the
Code may provide).

(d)

Termination of Employment, Death or Disability.  No Incentive Stock Option may
be exercised unless, at the time of such exercise, the optionee is, and has been
continuously since the date of grant of his or her option, employed by the
Corporation, except that, unless otherwise specified in the applicable option
agreement:

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(i)

an Incentive Stock Option may be exercised within the period of three months
after the date the optionee ceases to be an employee of the Corporation (or
within such lesser period as may be specified in the applicable option
agreement), provided, that the agreement with respect to such option may
designate a longer exercise period and that the exercise after such three-month
period shall be treated as the exercise of a non-statutory option under the
Plan;

(ii)

if the optionee dies while in the employ of the Corporation, or within three
months after the optionee ceases to be such an employee, the Incentive Stock
Option may be exercised by the person to whom it is transferred by will or the
laws of descent and distribution within the period of one year after the date of
death (or within such lesser period as may be specified in the applicable option
agreement); and

(iii) if the optionee becomes disabled (within the meaning of Section 22(e)(3)
of the Code or any successor provisions thereto) while in the employ of the
Corporation, the Incentive Stock Option may be exercised within the period of
one year after the date the optionee ceases to be such an employee because of
such disability (or within such lesser period as may be specified in the
applicable option agreement).

For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-1(h) of the
Income Tax Regulations (or any successor regulations).  Notwithstanding the
foregoing provisions no Incentive Stock Option may be exercised after its
expiration date.

12.

Restricted Shares.

(a)  Awards.  The Board of Directors may from time to time in its discretion
award Restricted Shares to persons having a Business Relationship with the
Corporation and may determine the number of Restricted Shares awarded and the
terms and conditions of, and the amount of payment, if any, to be made by such
persons.  Each award of Restricted Shares will be evidenced by a written
agreement executed on behalf of the Corporation and containing terms and
conditions not inconsistent with the Plan as the Board of Directors shall
determine to be appropriate in its sole discretion.

(b)

Restricted Period; Lapse of Restrictions.  At the time an award of Restricted
Shares is made, the Board of Directors shall establish a period of time (the
“Restricted Period”) applicable to such award which shall not be more than ten
years.  Each award of Restricted Shares may have a different Restricted Period.
 In lieu of establishing a Restricted Period, the Board of Directors may
establish restrictions based only on the achievement of specified performance
measures or a time release schedule.  At the time an award is made, the Board of
Directors may, in its discretion, prescribe conditions for the incremental lapse
of restrictions during the Restricted Period and for the lapse or termination of
restrictions upon the occurrence of other conditions in addition to or other
than the expiration of the Restricted Period with respect to all or any portion
of the Restricted Shares.  Such conditions may include, without limitation, the
death or disability of the participant to whom Restricted Shares are awarded,
retirement of the participant pursuant to normal or early retirement under any
retirement plan of the Corporation or termination by the Corporation of the
participant’s employment other than for cause, or the occurrence of a change in
control of the Corporation.  Such conditions may also include performance
measures, which, in the case of any such award of Restricted Shares to a
participant who is a “covered employee” within the meaning of Section 162(m) of
the Code, shall be based on one or more of the following criteria:  earnings per
share, market value per share, return on invested capital, return on operating
assets and return on equity.  The Board of Directors may also, in its
discretion, shorten or terminate the Restricted Period or waive any conditions
for the lapse or termination of restrictions with respect to all or any portion
of the Restricted Shares at any time after the date the award is made.

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(c)

Rights of Holder; Limitations Thereon.  Upon an award of Restricted Shares, a
stock certificate representing the number of Restricted Shares awarded to the
participant shall be registered in the participant’s name and, at the discretion
of the Board of Directors, will be either delivered to the participant with an
appropriate legend or held in custody by the Corporation or a bank for the
participant’s account.  The participant shall generally have the rights and
privileges of a stockholder as to such Restricted Shares, including the right to
vote such Restricted Shares, except that the following restrictions shall apply:
(i) with respect to each Restricted Share, the participant shall not be entitled
to delivery of an unlegended certificate until the expiration nor termination of
the Restricted Period, and the satisfaction of any other conditions prescribed
by the Board of Directors, relating to such Restricted Share; (ii) with respect
to each Restricted Share, such share may not be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of until the expiration of the
Restricted Period, and the satisfaction of any other conditions prescribed by
the Board of Directors, relating to such Restricted Share (except, subject to
the provisions of the participant’s stock restriction agreement, by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA or the rules promulgated
thereunder) and (iii) all of the Restricted Shares as to which restrictions have
not at the time lapsed shall be forfeited and all rights of the participant to
such Restricted Shares shall terminate without further obligation on the part of
the Corporation unless the participant has remained in a Business Relationship
with the Corporation or any of its subsidiaries until the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Board of Directors applicable to such Restricted
Shares.  Upon the forfeiture of any Restricted Shares, such forfeited shares
shall be transferred to the Corporation without further action by the
participant.  At the discretion of the Board of Directors, cash and stock
dividends with respect to the Restricted Shares may be either currently paid or
withheld by the Corporation for the participant’s account, and interest may be
paid on the amount of cash dividends withheld at a rate and subject to such
terms as determined by the Board of Directors.  The participant shall have the
same rights and privileges, and be subject to the same restrictions, with
respect to any shares received pursuant to Section 16 hereof.

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(d)

Delivery of Unrestricted Shares.  Upon the expiration or termination of the
Restricted Period and the satisfaction of any other conditions prescribed by the
Board of Directors, the restrictions applicable to the Restricted Shares shall
lapse and a stock certificate for the number of Restricted Shares with respect
to which the restrictions have lapsed shall be delivered, free of all such
restrictions, except any that may be imposed by law including without limitation
securities laws, to the participant or the participant’s beneficiary or estate,
as the case may be.  The Corporation shall not be required to deliver any
fractional share of Common Stock but will pay, in lieu thereof, the fair market
value (determined as of the date the restrictions lapse) of such fractional
share to the participant or the participant’s beneficiary or estate, as the case
may be.

13.

Additional Provisions.

(a)

Additional Provisions.  The Board of Directors may, in its sole discretion,
include additional provisions in option or Restricted Stock agreements covering
options or Restricted Stock granted under the Plan, including without
limitation, restrictions on transfer, repurchase rights, rights of first
refusal, commitments to pay cash bonuses, to make, arrange for or guaranty loans
or to transfer other property to optionees upon exercise of options, or such
other provisions as shall be determined by the Board of Directors; provided,
that such additional provisions shall not be inconsistent with any other term or
condition of the Plan and such additional provisions shall not cause any
Incentive Stock Option granted under the Plan to fail to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code or result in the
imposition of an additional tax under Section 409A of the Code.

(b)

Acceleration, Extension, Etc.  The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised if it would not cause any Incentive Stock Option granted
under the Plan to fail to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code or result in the imposition of an additional
tax under Section 409A of the Code.

14.

General Restrictions.

(a)

Investment Representations.  The Corporation may require any person to whom
Restricted Shares or an option is granted, as a condition of receiving such
Restricted Shares or exercising such option, to give written assurances in
substance and form satisfactory to the Corporation to the effect that such
person is acquiring the Restricted Shares or Common Stock subject to the option
for his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Corporation deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Corporation in connection with any public offering of its Common Stock.

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(b)

Compliance with Securities Law.  Each option and grant of Restricted Shares
shall be subject to the requirement that if, at any time, counsel to the
Corporation shall determine that the listing, registration or qualification of
the Restricted Shares or shares subject to such option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with the issuance or purchase of shares
thereunder, such Restricted Shares shall not be granted and such option may not
be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of Directors.
 Nothing herein shall be deemed to require the Corporation to apply for or to
obtain such listing, registration or qualification, or to satisfy such
condition.

15.

Rights as a Stockholder.

The holder of an option shall have no rights as a stockholder with respect to
any shares covered by the option (including, without limitation, any rights to
receive dividends or non-cash distributions with respect to such shares) until
the date of issue of a stock certificate to him or her for such shares.  No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.

16.

Adjustment Provisions for Recapitalization, Reorganizations and Related
Transactions.

(a)

Recapitalization and Related Transactions.  If, through or as a result of any
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Corporation, or (ii) additional shares or new or
different shares or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of shares reserved
for issuance under the Plan, (y) the number and kind of Restricted Shares
granted and shares or other securities subject to any then outstanding options
under the Plan, and (z) the exercise price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable.  Notwithstanding the
foregoing, no adjustment shall be made pursuant to this Section 16 if such
adjustment (i) would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 or (ii) would be considered as the adoption of a new
plan requiring stockholder approval.

(b)

Reorganization, Merger and Related Transactions.  If the Corporation shall be
the surviving corporation in any reorganization, merger or consolidation of the
Corporation with one or more other corporations, any then outstanding Restricted
Shares or option granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
such Restricted Shares or options would have been entitled immediately following
such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the purchase price as to which such options may be
exercised so that the aggregate purchase price as to which such options may be
exercised shall be the same as the aggregate purchase price as to which such
options may be exercised for the shares remaining subject to the options
immediately prior to such reorganization, merger, or consolidation.

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(c)  Board Authority to Make Adjustments.  Any adjustments made under this
Section 16 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive.  No fractional shares will be issued under the Plan on
account of any such adjustments.

 

 

 

 

 

17.

Merger, Consolidation, Asset Sale, Liquidation, Etc.

(a)

General.  In the event of a consolidation or merger in which the Corporation is
not the surviving corporation, or sale of all or substantially all of the assets
of the Corporation in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Corporation (collectively, a "Corporate
Transaction"), the Board of Directors of the Corporation, or the board of
directors of any corporation assuming the obligations of the Corporation, may,
in its discretion, take any one or more of the following actions, as to
outstanding options: (i) provide that such Restricted Shares or options shall be
assumed, or equivalent Restricted Shares or options shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), provided that any
such options substituted for Incentive Stock Options shall meet the requirements
of Section 424(a) of the Code, (ii) upon written notice, provide that all
unexercised options and Restricted Shares will terminate immediately prior to
the consummation of such transaction unless such options are exercised by the
optionee within a specified period following the date of such notice, (iii) in
the event of a Corporate Transaction under the terms of which holders of the
Common Stock of the Corporation will receive upon consummation thereof a cash
payment for each share surrendered in the Corporate Transaction (the
"Transaction Price"), make or provide for a cash payment to the optionees equal
to the difference between (A) the Transaction Price times the number of shares
of Common Stock subject to such outstanding options (to the extent then
exercisable at prices not in excess of the Transaction Price) and (B) the
aggregate exercise price of all such outstanding options in exchange for the
termination of such options, and (iv) provide that all restrictions on
Restricted Shares shall lapse in full or in part and all or any outstanding
options shall become exercisable in full or in part immediately prior to such
event.

(b)

Substitute Restricted Shares or Options.  The Corporation may grant Restricted
Shares or options under the Plan in substitution for Restricted Shares or
options held by persons in a Business Relationship with another corporation who
enter into a Business Relationship with the Corporation, or a subsidiary of the
Corporation, as the result of a merger or consolidation of the employing
corporation with the Corporation or a subsidiary of the Corporation, or as a
result of the acquisition by the Corporation, or one of its subsidiaries, of
property or stock of the other corporation.  The Corporation may direct that
substitute Restricted Shares or options be granted on such terms and conditions
as the Board of Directors considers appropriate in the circumstances.

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18.

No Special Employment Rights.

Nothing contained in the Plan or in any Restricted Share or option agreement
shall confer upon any holder of Restricted Shares or optionee any right with
respect to the continuation of his or her employment by, or other Business
Relationship with, the Corporation or interfere in any way with the right of the
Corporation at any time to terminate such employment or Business Relationship or
to increase or decrease the compensation of the optionee.

 

19.

Other Employee Benefits.

Except as to plans which by their terms include such amounts as compensation,
the amount of any compensation deemed to be received by an employee as a result
of the grant of Restricted Shares or lapse of restrictions thereon, the exercise
of an option or the sale of shares received upon such exercise will not
constitute compensation with respect to which any other employee benefits of
such employee are determined, including, without limitation, benefits under any
bonus, pension, profit-sharing, life insurance or salary continuation plan,
except as otherwise specifically determined by the Board of Directors.

20.

Amendment of the Plan.

(a)

The Board of Directors may at any time, and from time to time, modify or amend
the Plan in any respect, except that if at any time the approval of the
stockholders of the Corporation is required under Section 422 of the Code or any
successor provision with respect to Incentive Stock Options, or the legal
requirements relating to the administration of equity compensation plans, if
any, under applicable provisions of federal securities laws, applicable state
corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system or quotation system on which the Common Stock
is listed or quoted, and the applicable laws and rules of any foreign country or
jurisdiction where awards are, or will be, granted under the Plan.

(b)

The termination or any modification or amendment of the Plan shall not, without
the consent of an optionee or holder of Restricted Shares, affect his or her
rights under an option or grant of Restricted Shares previously granted to him
or her.  With the consent of the optionee or holder of Restricted Shares
affected, the Board of Directors may amend outstanding option or Restricted
Share agreements in a manner not inconsistent with the Plan.  The Board of
Directors shall have the right to amend or modify the terms and provisions of
the Plan and of any outstanding Incentive Stock Options granted under the Plan
to the extent necessary to qualify any or all such options for such favorable
federal income tax treatment (including deferral of taxation upon exercise) as
may be afforded incentive stock options under Section 422 of the Code.

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21.

Withholding.

(a)

The Corporation shall have the right to deduct from payments of any kind
otherwise due to the optionee or holder of Restricted Shares any federal, state
or local taxes of any kind required by law to be withheld with respect to any
shares issued upon exercise of options or lapse of restrictions on Restricted
Shares under the Plan.  Subject to the prior approval of the Corporation, which
may be withheld by the Corporation in its sole discretion, the optionee or
holder of Restricted Shares may elect to satisfy such obligations, in whole or
in part, (i) by causing the Corporation to withhold shares of Common Stock
otherwise issuable pursuant to the exercise of an option or lapse of
restrictions on Restricted Shares or (ii) by delivering to the Corporation
shares of Common Stock already owned by the optionee or holder of Restricted
Shares.  The shares so delivered or withheld shall have a Fair Market Value
equal to such withholding obligation as of the date that the amount of tax to be
withheld is to be determined.  An optionee who has made an election pursuant to
this Section 21(a) may satisfy his or her withholding obligation only with
shares of Common Stock which are not subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirements.

(b)

The acceptance of shares of Common Stock upon exercise of an Incentive Stock
Option shall constitute an agreement by the optionee (i) to notify the
Corporation if any or all of such shares are disposed of by the optionee within
two years from the date the option was granted or within one year from the date
the shares were transferred to the optionee pursuant to the exercise of the
option, and (ii) if required by law, to remit to the Corporation, at the time of
and in the case of any such disposition, an amount sufficient to satisfy the
Corporation's federal, state and local withholding tax obligations with respect
to such disposition, whether or not, as to both (i) and (ii), the optionee is in
the employ of the Corporation at the time of such disposition.

(c)

Notwithstanding the foregoing, in the case of a Reporting Person whose options
have been granted in accordance with the provisions of Section 3(b) herein, no
election to use shares for the payment of withholding taxes shall be effective
unless made in compliance with any applicable requirements of Rule 16b-3.

22.

Section 162(m) of the Code.  The Board of Directors, in its sole discretion, may
require that one or more agreements contain provisions which provide that, in
the event Section 162(m) of the Code, or any successor provision relating to
excessive employee remuneration, would operate to disallow a deduction by the
Corporation for all or part of any payment of an award under the Plan, a
grantee’s receipt of the portion that would not be deductible by the Corporation
shall be deferred to either the earliest date at which the Board reasonably
anticipates that the grantee's remuneration either does not exceed the limit set
forth in Section 162(m) of the Code or is not subject to Section 162(m) of Code,
or the calendar year in which the grantee separates from service.  This Section
22 shall be applied and construed consistently with Section 409A of the Code and
the regulations (and guidance) thereunder.

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23.

Effective Date and Duration of the Plan.

(a)

Effective Date.  The Plan shall become effective when adopted by the Board of
Directors, but no Incentive Stock Option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the
Corporation's stockholders.  If such stockholder approval is not obtained within
twelve (12) months after the date of the Board's adoption of the Plan, no
options previously granted under the Plan shall be deemed to be Incentive Stock
Options and no Incentive Stock Options shall be granted thereafter.  Amendments
to the Plan not requiring stockholder approval shall become effective when
adopted by the Board of Directors; amendments requiring stockholder approval (as
provided in Section 20) shall become effective when adopted by the Board of
Directors, but no Incentive Stock Option granted after the date of such
amendment shall become exercisable (to the extent that such amendment to the
Plan was required to enable the Corporation to grant such Incentive Stock Option
to a particular optionee) unless and until such amendment shall have been
approved by the Corporation's stockholders.  If such stockholder approval is not
obtained within twelve (12) months of the Board's adoption of such amendment,
any Incentive Stock Options granted on or after the date of such amendment shall
terminate to the extent that such amendment to the Plan was required to enable
the Corporation to grant such option to a particular optionee.  Subject to this
limitation, options may be granted under the Plan at any time after the
effective date and before the date fixed for termination of the Plan.

(b)

Termination.  Unless sooner terminated in accordance with Section 17, the Plan
shall terminate upon the earlier of (i) the close of business on the day next
preceding the tenth anniversary of the date of its adoption by the Board of
Directors, or (ii) the date on which all shares available for issuance under the
Plan shall have been issued pursuant to the exercise or cancellation of
Restricted Shares or options granted under the Plan.  If the date of termination
is determined under (i) above, then Restricted Shares or options outstanding on
such date shall continue to have force and effect in accordance with the
provisions of the instruments evidencing such Restricted Shares or options.

24.

Governing Law.

The provisions of this Plan shall be governed and construed in accordance with
the laws of the State of Nevada without regard to the principles of conflicts of
laws.

Adopted by the Board of Directors on August 20, 2009

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