Exhibit 10.1

PRO-DEX, INC.

SECOND AMENDED AND RESTATED

2004 STOCK OPTION PLAN

This Second Amended and Restated 2004 Stock Option Plan (the “Plan”) is adopted
in consideration for services rendered and to be rendered to Pro-Dex, Inc. or
any Related Company (as defined below).

1. Definitions. The terms used in this Plan shall, unless otherwise indicated or
required by the particular context, have the following meanings:

(a) Award Shares: The shares of Common Stock underlying an Option or Restricted
Stock granted to an Employee.

(b) Board: The Board of Directors of Pro-Dex, Inc.

(c) Code: The Internal Revenue Code of 1986, as amended.

(d) Common Stock: The no par value common stock of Pro-Dex, Inc.

(e) Company: Pro-Dex, Inc., a corporation incorporated under the laws of
Colorado, together with any successors thereto.

(f) Date of Grant: The date on which an Option or Restricted Stock is granted
under the Plan.

(g) Disinterested Person: A director who has not been granted or awarded equity
securities pursuant to any plan of the Company or of any Related Company of the
Company during one year prior to that director’s service as an administrator of
the Plan, except as otherwise provided in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) with respect to
(i) participation in formula plans or ongoing securities acquisitions plans, and
(ii) an election to receive securities for an annual retainer fee.

(h) Employee: An Employee is an employee of the Company or any Related Company.

(i) Fair Market Value: The Fair Market Value of the Option Shares. Such Fair
Market Value as of any date shall be determined by the Governing Committee as of
the last business day for which the prices or quotes discussed in this sentence
are available prior to the date an Option is granted and shall mean (i) the
closing price (on that date) of the Common Stock on the principal national
securities exchange by which the Common Stock is traded, if the stock is then
traded on a national securities exchange; or, (ii) the last reported sale price
(on that date) of the Common Stock on an established securities market, if the
stock is not then traded on a national securities exchange; or (iii) the closing
bid price last quoted (on that date) by an established securities market or
quotation service for over-the-counter securities, if the last sale

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price is not reported for the Common Stock on the service or market on which the
stock is quoted. However, if the Common Stock is not publicly traded at the time
an Option is granted under the Plan, Fair Market Value shall be deemed to be the
fair value of the stock as determined in good faith by the Board or the
Governing Committee, based on such valuations and other factors it deems
appropriate.

(j) Governing Committee: The “Governing Committee” is the following: (i) with
respect to grants of Options to Employees who are not also Officers and/or
Directors of the Company, the Plan shall be administered by a Governing
Committee composed of the Board or at least two members of the Board; and
(ii) with respect to grants of Options to Employees who are also Officers or
Directors, the Plan shall be administered by a Governing Committee, selected by
the Board and typically the Company’s Compensation Committee, consisting of two
or more persons, each of whom is a Disinterested Person.

(k) Incentive Stock Options (“ISOs”): “Incentive Stock Options” as that term is
defined in Section 422 of the Code.

(l) Key Employee: A person designated by the Governing Committee who either is
employed by the Company or a Related Company (see below) and upon whose
judgment, initiative and efforts the Company or a Related Company is largely
dependent for the successful conduct of its business; provided, however, that
Key Employees shall not include those members of the Board who are not employees
of the Company or a Related Company.

(m) Non-Incentive Stock Options (“Non-ISOs”): Options which are not intended to
qualify as “Incentive Stock Options” under Section 422 of the Code.

(n) Option: The rights granted to an Employee to purchase a stated number of
shares of Common Stock pursuant to the terms, conditions and restrictions of the
Plan and an Option Agreement.

(o) Option Agreement: The written agreement (and any amendment or supplement
thereto) between the Company and an Employee designating the terms, conditions
and restrictions of an Option.

(p) Option Shares: The shares of Common Stock underlying an Option granted to an
Employee.

 

(q) Optionee: An Employee who has been granted an Option.

(r) Prior Plans: The First Amended and Restated 2004 Stock Option Plan and the
2004 Stock Option Plan of the Company.

(s) Related Company: Any corporation that is a “parent corporation” or a
“subsidiary corporation” with respect to the Company, as those terms are defined
in Section 424 of the Code. The determination of whether a corporation is a
Related Company shall be made without regard to whether the corporation or the
relationship between the corporation and the Company now exists or comes into
existence hereinafter.

 

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(t) Restricted Stock: Shares of Common Stock granted pursuant to the terms of
Section 12 hereof.

(u) Restricted Stock Agreement: The written agreement (and any amendment or
supplement thereto) between the Company and an Employee designating the terms,
conditions and restrictions of Restricted Stock.

(v) Stock Award: Any Option or Restricted Stock granted under this Plan.

2. Purpose and Scope.

(a) The purpose of this Plan is to advance the interests of the Company and its
shareholders by affording Employees an opportunity for investment in the Company
and the incentive advantages inherent in stock ownership in this Company.

(b) This Plan authorizes the Governing Committee to grant Stock Awards to
Employees selected by the Governing Committee while considering criteria such as
employment position or other relationship with the Company, duties and
responsibilities, ability, productivity, length of service or association,
morale, interest in the Company, recommendations by supervisors, and other
matters.

3. Administration of the Plan.

(a) The Plan shall be administered by the Governing Committee. The Governing
Committee shall have the authority granted to it under this Section and under
each other Section of the Plan.

(b) In accordance with and subject to the provisions of the Plan, the Governing
Committee shall select the Employees to receive Stock Awards and shall determine
(i) the number of shares of Common Stock to be subject to each Stock Award,
which number shall be fixed as of the Date of Grant, (ii) the time at which each
Stock Award is to be granted, (iii) whether a Stock Award shall be granted in
exchange for the cancellation and termination of a previously granted option or
options under the Plan or otherwise, (iv) the purchase price for the Option
Shares, (v) the option period, and (vi) the manner in which the Option becomes
exercisable. In addition, the Governing Committee shall fix such other terms of
each Stock Award as the Governing Committee may deem necessary or desirable. The
Governing Committee shall determine the form of Option Agreement or Restricted
Stock Agreement to evidence each Stock Award.

(c) The Governing Committee from time to time may adopt such rules and
regulations for carrying out the purposes of the Plan as it may deem proper and
in the best interests of the Company. The Governing Committee shall keep minutes
of its meetings and those minutes shall be distributed to every member of the
Board.

(d) The Board may from time to time make such changes in and additions to the
Plan as it may deem proper and in the best interest of the Company; provided,
however, that no such change or addition shall impair any Stock Award previously
granted under the Plan, and that the approval by the affirmative vote of the
holders of a majority of the Company’s securities

 

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entitled to vote and represented at a meeting duly held in accordance with the
applicable laws of the State of Colorado, shall be required for any amendment
which would:

 

  (i) materially modify the eligibility requirements for receiving Stock Awards
under the Plan;

 

  (ii) materially increase the benefits accruing to Employees under the Plan; or

 

  (iii) increase the number of shares of Common Stock that may be issued under
the Plan.

(e) All actions taken and all interpretations and determinations made by the
Governing Committee in good faith (including determinations of Fair Market
Value) shall be final and binding upon all Employees, the Company and all other
interested persons. No member of the Governing Committee shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan, and all members of the Governing Committee shall, in
addition to rights they may have as directors of the Company, be fully protected
by the Company with respect to any such action, determination or interpretation.

(f) It is the further intent of the Plan that it conform in all respects with
(i) the requirements of Rule 16b-3 of Securities Exchange Act of 1934 (“Rule
16b-3”) and (ii) the Code. To the extent that any aspect of the Plan or its
administration is at any time viewed as inconsistent with the requirements of
Rule 16b-3 or the Code, that aspect shall be deemed to be modified, deleted, or
otherwise changed as necessary to ensure continued compliance with Rule 16b-3 or
Code requirements.

4. Number of Shares. The Board is authorized to appropriate, issue and sell for
the purposes of the Plan, and the Governing Committee is authorized to grant
Options or Restricted Stock with respect to, a total number, not in excess of an
aggregate maximum of (i) the sum of (A) 400,000 shares of Common Stock, plus
(B) any shares of Common Stock remaining available for issuance under the Prior
Plans as of the Effective Date of the Plan, plus (C) any shares of Common Stock
subject to an Option or Restricted Stock granted under the Prior Plans or the
Plan, which Option or Restricted Stock at any time is forfeited, cancelled,
terminated, expires or lapses for any reason without the issuance of shares
pursuant to the Option or Restricted Stock, or (ii) the number and kind of
shares of stock or other securities which in accordance with Section 8 may be
substituted for the shares authorized under sub-section (i) or into which such
shares shall be adjusted.

5. Eligibility. Options which are intended to qualify as ISOs will be granted
only to Key Employees. Key Employees and other Employees may hold more than one
Option Agreement under the Plan and may hold Stock Awards under the Plan and
options or awards granted pursuant to other plans or otherwise.

6. Options. The Governing Committee may grant Options pursuant to this Plan.

(a) Option Price. The Governing Committee shall determine the purchase price for
the Option Shares, provided that the purchase price to be paid by Optionees for
the

 

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Option Shares shall not be less than 100 percent of the Fair Market Value of the
Option Shares at the time the Option is granted. The purchase price for the
Option Shares shall be a fixed, non-fluctuating, price.

(b) Duration and Exercise of Options.

(i) Each Option granted under the Plan shall be exercisable on such date or
dates and during such period and for such number of shares as shall be
determined pursuant to the provisions of the Option Agreement. The Governing
Committee shall have the right to accelerate the date of exercise of any Option,
provided that the Governing Committee shall not accelerate the exercise of any
ISO granted if such acceleration would violate the annual vesting limitation
contained in Section 422(d)(1) of the Code. In no event shall the Governing
Committee have the discretion to extend an Option beyond the earlier of the last
date that the Option could have been exercised under the initial term of the
Option and the date that is 10 years after the initial Date of Grant, unless
said extension is granted at a time when the exercise price of the Option does
not equal or exceed the Fair Market Value of the stock that could be purchased
pursuant to the Option.

(ii) Except as otherwise permitted under Subsection (d) of this Section 6,
during the lifetime of the Optionee, the Option shall be exercisable only by the
Optionee; provided, that in the event of the legal disability of an Optionee,
the guardian or personal representative of the Optionee may exercise the Option.
However, if the Option is an ISO it may be exercised by the guardian or personal
representative of the Optionee only if such guardian or personal representative
obtains a ruling from the Internal Revenue Service or an opinion of counsel to
the effect that neither the grant nor the exercise of such power is violative of
Section 422(b)(5) of the Code. Any opinion of counsel must be both from counsel
and in a form acceptable to the Governing Committee.

(iii) The Governing Committee may determine whether any Option shall be
exercisable as provided in item (i) of this Subsection (b) or whether the
Options shall be exercisable in installments only; if the Governing Committee
determines the latter, it shall determine the number of installments and the
percentage of the Option exercisable at each installment date. All such
installments shall be cumulative.

(iv) If the Optionee ceases to be employed by either the Company or a Related
Company because of the death or permanent and total disability (as defined in
Section 22(e)(3) of the Code) of the Optionee, any Option held by the Optionee
at the time his employment ceases may be exercised within 90 days after the date
his employment ceased, but only to the extent that the Option was exercisable
according to its terms on the date the Optionee’s employment ceased. After such
90-day period, any unexercised portion of an Option shall expire.

(v) Notwithstanding the provisions of item (iv) of this Subsection (d), if an
Optionee’s employment by the Company or a Related Company ceases for any reason
other than the Optionee’s death or permanent and total disability, any
unexercised portion of any Option held by the Optionee at the time his
employment ceases may be exercised within 30 days after the date his employment
ceased, but only to the extent that the Option was exercisable

 

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according to its terms on the date the Optionee’s employment ceased. After such
date, any unexercised portion of an Option shall expire.

(vi) Each Option may be exercised in whole or part by delivering to the Chief
Financial Officer of the Company written notice of the number of shares with
respect to which the Option is to be exercised and by paying in full the
purchase price for the Option Shares purchased as set forth in Subsection (c) of
this Section 6; provided, that an Option may not be exercised in part unless the
purchase price for the Option Shares purchased is at least $2,000.

(vii) To the extent required to qualify for the exemption provided by Rule 16b-3
under the Exchange Act, and any successor provision, at least six months must
elapse from the date of acquisition of an Option by any person who is subject to
the reporting requirements of Section 16(a) of the Exchange Act to the date of
exercise of such Option or disposition of the Option Shares.

(c) Payment for Option Shares. If the purchase price of the Option Shares
purchased by any Optionee at one time exceeds $2,000, the Governing Committee
may permit all or part of the purchase price for the Option Shares to be paid by
the Optionee by (a) delivering to the Company shares of the Company’s Common
Stock previously owned by the Optionee with a Fair Market Value as of the date
of payment equal to the portion of the purchase price for the Option Shares that
the Optionee does not pay in cash, (b) having shares withheld from the amount of
shares to be received by the Optionee, or (c) complying with any other payment
mechanisms as the Governing Committee may approve from time to time. As a
condition to the exercise of any Option granted under this Plan, the Optionee
shall make such arrangements as the Governing Committee may require for the
satisfaction of any federal, state or withholding tax obligations which may
arise in connection with such exercise. The issuance, transfer or delivery of
certificates of shares of Common Stock pursuant to the exercise or Options may
be delayed, at the discretion of the Governing Committee, until the Governing
Committee is satisfied that the applicable requirements of federal and state
securities laws and the withholding provisions of the Code have been met. Until
such person has been issued a certificate or certificates for the Option Shares
so purchased, he or she shall possess no rights of a recordholder with respect
to any of such shares.

(d) Nontransferability of Option. No Option granted under the Plan shall be
transferable by the Optionee, either voluntarily or involuntarily, except by
will or the laws of descent and distribution, pursuant to a qualified domestic
relations order as defined in the Code, or pursuant to the Employee Retirement
Income Security Act or rules promulgated thereunder; except that (a) Optionees
who are not subject to Section 16(b) of the Exchange Act may upon written notice
transfer a Non-ISO (i) to an Optionee’s spouse, parents, siblings, or lineal
descendants, or (ii) to a trust for the benefit of the Optionee or any of the
Optionee’s spouse, parents, siblings, or lineal descendants, or (iii) to any
corporation or partnership controlled by the Optionee; and (b) Optionees who are
subject to Section 16(b) of the Exchange Act may transfer Non-ISOs to immediate
family members and family trusts. No Option shall be subject to execution,
attachment or similar process. Except as specifically provided herein, any
attempt to transfer the Option shall void the Option.

 

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(e) Limitation on Amount of Option. The aggregate Fair Market Value (determined
at the time any ISO is granted) of the Common Stock with respect to which an
Optionee’s ISOs, together with incentive stock options granted under any other
plan of the Company and any parent, are exercisable for the first time by such
Optionee during any calendar year shall not exceed $100,000. If an Optionee
holds ISOs that become first exercisable (including as a result of acceleration
of exercisability under the Plan) in any one year for shares having a Fair
Market Value at the date of grant in excess of $100,000, then the most recently
granted of the ISOs, to the extent that they are exercisable for shares having
an aggregate Fair Market Value in excess of the limit, shall be deemed to be
Non-ISOs.

(f) Ten Percent Shareholder Rule. With respect to ISOs, no Option may be granted
to a Key Employee who, at the time the Option is granted, owns stock possessing
more than 10 percent of the total combined voting power of all classes of stock
of the Company or of any “parent corporation” or “subsidiary corporation” as
those terms are defined in Section 424 of the Code, unless at the time the
Option is granted the purchase price for the Option shares is at least 110
percent of the Fair Market Value of the Option Shares at the time the ISO is
granted and such Option by its terms is not exercisable after the expiration of
five years from the Date of Grant. For purposes of the preceding sentence, stock
ownership shall be determined as provided in Section 424 of the Code.

7. Restricted Stock: The Governing Committee may grant shares of Restricted
Stock pursuant to this Plan. To the extent consistent with the Company’s Bylaws,
at the Governing Committee’s election, shares of Restricted Stock may be
(i) held in book entry form subject to the Company’s instructions until any
restrictions relating to the Restricted Stock lapse, or (ii) evidenced by a
certificate, which certificate shall be held in such form and manner as
determined by the Governing Committee and shall contain an appropriate legend
clearly stating that the transferability of the Restricted Stock represented by
the certificate is restricted by the Restricted Stock Agreement and this Plan.
The Restricted Stock Agreements shall be in such form and shall contain such
terms and conditions as the Governing Committee shall deem appropriate from time
to time and the terms and conditions of separate Restricted Stock Agreements
need not be identical; provided, however, that each Restricted Stock Agreement
shall include (through incorporation of the provisions hereof by reference in
the agreement or otherwise) the substance of each of the following provisions:

(a) Consideration. Restricted Stock may be awarded in consideration for (A) past
or future services actually or to be rendered to the Company or a Related
Company, or (B) any other form of legal consideration that may be acceptable to
the Governing Committee in its sole discretion and permissible under applicable
law.

(b) Vesting. Shares of Restricted Stock may be subject to forfeiture to the
Company in accordance with a vesting schedule to be determined by the Governing
Committee in its sole discretion and set forth in the Restricted Stock
Agreement.

(c) Termination of Service. In the event a Restricted Stock holder ceases to be
employed by either the Company or a Related Company, the Company may receive
pursuant to a forfeiture provision to be determined by the Governing Committee
in its sole discretion and set

 

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forth in the Restricted Stock Agreement, any or all Restricted Shares that have
not vested as of the date of termination.

(d) Transferability. Rights to acquire shares of Common Stock under a Restricted
Stock Agreement shall be transferable by the holder only upon such terms and
conditions as are set forth in the Restricted Stock Agreement, as the Governing
Committee shall determine in its sole discretion, so long as such Common Stock
remains subject to the terms and conditions of the Restricted Stock Agreement.

8. Changes in Stock, Adjustments, Etc.

(a) In the event that each of the outstanding shares of Common Stock (other than
shares held by dissenting shareholders which are not changed or exchanged)
should be changed into, or exchanged for, a different number or kind of shares
of stock or other securities of the Company, or, if further changes or exchanges
of any stock or other securities into which the Common Stock shall have been
changed, or for which it shall have been exchanged, shall be made (whether by
reason of merger, consolidation reorganization, recapitalization, stock
dividends, reclassification, split-up, combination or shares or otherwise), then
there shall be substituted for each share of Common Stock that is subject to the
Plan but not subject to an outstanding Option or Restricted Stock thereunder,
the number and kind of shares of stock or other securities into which each
outstanding share of Common Stock (other than shares held by dissenting
shareholders which are not changed or exchanged) shall be so changed or for
which each outstanding share of Common Stock (other than shares held by
dissenting shareholders) shall be exchanged, provided, in the event that the
Optionee is providing direct services to the Company at the time the shares are
substituted, such shares shall constitute “service recipient stock” as that term
is defined by the IRS for purposes of Section 409A of the Code. Any securities
so substituted shall be subject to similar successive adjustments.

(b) In the event of any such changes or exchanges, the Governing Committee shall
determine whether, in order to prevent dilution or enlargement of rights, an
adjustment should be made in the number, or kind, or Option price of the shares
or other securities then subject to an Option or Restricted Stock granted
pursuant to the Plan and the Governing Committee shall make any such adjustment,
and such adjustments shall be made and shall be effective and binding for all
purposes of the Plan.

9. Relationship to Employment. Nothing contained in the Plan, or in any Stock
Award granted pursuant to the Plan, shall confer upon any recipient or holder of
a Stock Award any right with respect to continuance of employment by the Company
or any Related Company, or interfere in any way with the right of the Company or
any Related Company to terminate the employment of a Stock Award recipient or
holder at any time.

10. Rights as a Shareholder. No person shall have any rights as a shareholder
with respect to any shares covered by an Stock Award until that person shall
become the holder of record of such shares (whether or not subject to
forfeiture) and, except as provided in Section 8, no adjustments shall be made
for dividends or other distributions or other rights as to which there is an
earlier record date.

 

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11. Securities Laws Requirements. No Award Shares shall be issued unless and
until, in the opinion of the Company, any applicable registration requirements
of the Securities Act of 1933, as amended (“Securities Act”), any applicable
listing requirements of any securities exchange on which stock of the same class
is then listed, and any other requirements of law or of any regulatory bodies
having jurisdiction over such issuance and delivery, have been fully complied
with. Each Option, each Restricted Stock certificate and each Award Share
certificate may be imprinted with legends reflecting federal and state
securities laws, restrictions and conditions, and the Company may comply
therewith and issue “stop transfer” instructions to its transfer agent and
registrar in good faith without liability.

12. Disposition of Shares. Each Optionee, as a condition of exercise, and each
Restricted Stock holder, as a condition to the Restricted Stock grant, shall
represent, warrant and agree, in a form of written certificate approved by the
Company, as follows: (a) that all Award Shares are being acquired solely for his
own account and not on behalf of any other person or entity; (b) that no Award
Shares will be sold or otherwise distributed in violation of the Securities Act,
or any other applicable federal or state securities laws; (c) that if he is
subject to reporting requirements under Section 16(a) of the Exchange Act, he
will (i) not violate Section 16(b) of the Exchange Act, (ii) furnish the Company
with a copy of each Form 4 and Form 5 filed by him, and (iii) timely file all
reports required under the federal securities laws; and (d) that he will report
all sales of Award Shares to the Company in writing on a form prescribed by the
Company.

13. Effective Date of Plan; Termination Date of Plan. The Plan shall be
effective on the date the Plan has been approved by the Board and the
shareholders of the Company. The Plan was adopted, subject to shareholder
approval, by the Board as of September 12, 2011. The Plan shall terminate on
September 12, 2021, except as to Stock Awards previously granted and outstanding
under the Plan at that time. No Stock Awards shall be granted after the date on
which the Plan terminates. In no event may the Option period exceed ten years
from the date on which the Option is granted. The Plan may be abandoned or
terminated at any earlier time by the Board, except with respect to any Stock
Awards then outstanding under the Plan.

14. Withholding Taxes. The Company, or any Related Company, may take such steps
as it may deem necessary or appropriate for the withholding of any taxes which
the Company, or any Related Company, is required by any law or regulation or any
governmental authority, whether federal, state or local, domestic or foreign, to
withhold in connection with any Stock Award including, but not limited to, the
withholding of all or any portion of any payment or the withholding of issuance
of Option Shares to be issued upon the exercise of any Option.

15. Change in Control, Stock Dividends, Reorganization and Other Extraordinary
Actions.

(a) If (i) the Company shall at any time be involved in a transaction described
in Section 424(a) of the Code (or any successor provision) or any “corporate
transaction” described in the regulations thereunder; (ii) the Company shall
declare dividends payable in, or shall subdivide or combine, its Common Stock or
(iii) any other event with substantially the same effect shall occur, the
Governing Committee shall, with respect to each outstanding Option,
proportionately adjust the number of Option Shares and/or the exercise price per
share so as to

 

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preserve the rights of the Optionee substantially proportionate to the rights of
the Optionee prior to such event, and to the extent that such action shall
include an increase or decrease in the number of Option Shares subject to
outstanding Options, the number of shares available under this Plan shall
automatically be increased or decreased, as this case may be, proportionately,
without further action on the part of the Governing Committee, the Company or
the Company’s shareholders.

(b) If the Company is liquidated or dissolved, the Governing Committee may allow
the holders of any outstanding Options to exercise all or any part of the
unvested portion of the Options held by them; provided, however, that such
Options must be exercised prior to the effective date of such liquidation or
dissolution. If the Option Holders do not exercise their Options prior to such
effective date, each outstanding Option shall terminate as of the effective date
of the liquidation or dissolution.

(c) The grant of a Stock Award shall not affect in any way the right or power of
the Company to make adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge, consolidate or dissolve, to
liquidate or to sell or transfer all or part of its business or assets.

(d) In the event of a Change in Control (as defined below) of the Company, the
Governing Committee may, in its discretion, accelerate all outstanding Options
and Restricted Stock so that (i) Options immediately become exercisable for the
duration of the term of the Option and (ii) Restricted Stock immediately becomes
fully vested. For purposes of this Subsection (d), “Change in Control” shall
mean the occurrence of any of the following events: (i) any “person” or “group”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule
13d-3 under said Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company’s then outstanding voting securities; (ii) a change in the
composition of the Board of the Company occurring within a one-year period,
resulting in the change of sixty percent or more of the directors serving on the
Board from the beginning of the of the one-year period to the end of the
one-year period; (iii) there is a merger or consolidation of the Company in
which the Company does not survive as an independent public company; or (iv) the
acquisition of all or substantially all the Company’s assets in a transaction or
series of related transactions with a third-party purchaser.

(e) If at any time the Company declares an Extraordinary Dividend, as defined
below, all (i) Options shall accelerate and thereupon become immediately
exercisable for the duration of the term of the Option and (ii) Restricted Stock
shall become immediately fully vested. For purposes of this Subsection (e),
“Extraordinary Dividend” shall mean a cash dividend payable to holders of record
of the Common Stock in an amount in excess of 10% of the then Fair Market Value
of the Company’s Common Stock.

16. Restrictions. The Company may impose such restrictions on Options and
Restricted Stock granted hereunder, or the Award Shares underlying such grants,
as it may deem advisable, including without limitation restrictions under the
federal securities laws, the requirements of any stock exchange or similar
organization and any blue sky, state or foreign securities laws applicable to
such securities.

 

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17. Other Provisions.

(a) The use of a masculine gender in the Plan shall also include within its
meaning the feminine, and the singular may include the plural, and the plural
may include the singular, unless the context clearly indicates to the contrary.

(b) Any expenses of administering the Plan shall be borne by the Company.

(c) This Plan shall be construed to be in addition to any and all other
compensation plans or programs. Neither the adoption of the Plan by the Board
nor the submission of the Plan to the shareholders of the Company shall be
construed as creating any limitations on the power of authority of the Board to
adopt such other additional incentive or other compensation arrangements as the
Board may deem necessary or desirable.

(d) The corporate laws of the State of Colorado shall govern all issues
concerning the relative rights of the Company and its shareholders under the
Plan. All other questions and obligations under the Plan shall be construed and
enforced in accordance with the internal laws of the State of California,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of California or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
California.

(e) Notwithstanding anything to the contrary contained in this Plan, this Plan
is intended to comply with the California Corporate Securities Law of 1968 and
the rules and regulations promulgated thereunder.

(f) If any provision of the Plan shall be held illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included.

(g) Headings are given to the sections of this Plan solely as a convenience to
facilitate reference. The reference to any statute, regulation or other
provision of law shall be construed to refer to any amendment to or successor of
such provision of law.

(h) The Plan shall be binding upon the Company, its successors and assigns, and
Optionees, their executors, administrators and permitted transferees and
beneficiaries.

 

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