LEGEND MEDIA STOCK OPTION PLAN
 
 
 
 
 

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TABLE OF CONTENTS
 

     Page      
ARTICLE I
PURPOSE
1
     
ARTICLE II
DEFINITIONS
1
2.1
Affiliate
1
2.2
Award
1
2.3
Award Agreement
1
2.4
Board
1
2.5
Cause
1
2.6
Change of Control
2
2.7
Code
4
2.8
Committee
4
2.9
Common Stock
4
2.10
Company
4
2.11
Consultant
4
2.12
Director
4
2.13
Effective Date
4
2.14
Employee
4
2.15
Exchange Act
4
2.16
Fair Market Value
4
2.17
Family Member
5
2.18
Good Reason
5
2.19
Holder
5
2.20
Incentive Stock Option
5
2.21
Non-Qualified Stock Option
5
2.22
Option
5
2.23
Option Agreement
5
2.24
Plan
5
2.25
Publicly Traded
5
2.26
Rule 16b-3
5
2.27
Section 162(m)
5
2.28
Section 409A
6
2.29
Ten Percent Shareholder
6
2.30
Total and Permanent Disability
6
     
ARTICLE III
EFFECTIVE DATE OF PLAN
6
     
ARTICLE IV
ADMINISTRATION
6
4.1
Composition of Committee
6
4.2
Powers
6
4.3
Additional Powers
7
4.4
Committee Action
7
4.5
No Exercise of Authority Resulting in Nonqualified Deferred Compensation
7
 
   
ARTICLE V
STOCK SUBJECT TO PLAN AND LIMITATIONS THEREON
7
5.1
Stock Grant and Award Limits
7
5.2
Stock Offered
8

 
 
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TABLE OF CONTENTS
(continued)
 

    Page      
ARTICLE VI
ELIGIBILITY FOR AWARDS; IMPACT OF TERMINATION  OF EMPLOYMENT, DIRECTOR STATUS OR
CONSULTANT STATUS ON AWARDS
8
6.1
Eligibility
8
6.2
Termination of Employment
8
6.3
Termination of Director Status
9
6.4
Termination of Consultant Status
10
6.5
Special Termination Rule
10
 
   
ARTICLE VII
OPTION TERMS
11
7.1
Option Period
11
7.2
Limitations on Exercise of Option; Vesting
11
7.3
Special Limitations on Incentive Stock Options
11
7.4
Option Agreement
12
7.5
Option Exercise Price and Payment
12
7.6
Shareholder Rights and Privileges
12
7.7
Options and Rights in Substitution for Stock Options Granted by Other
Corporations
12
     
ARTICLE VIII
RECAPITALIZATION OR REORGANIZATION
13
8.1
Adjustments to Common Stock
13
8.2
Recapitalization
13
8.3
Change of Control
13
8.4
Other Events
14
8.5
Powers Not Affected
14
8.6
No Adjustment for Certain Awards
14
8.7
No Adjustment to Result in Nonqualified Deferred Compensation
14
 
   
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
15
9.1
Amendment
15
9.2
Termination
15

 
ARTICLE X
MISCELLANEOUS
15
10.1
No Right to Award
15
10.2
No Rights Conferred
15
10.3
Other Laws; Withholding
15
10.4
No Restriction on Corporate Action
16
10.5
Restrictions on Transfer
16
10.6
Beneficiary Designations
16
10.7
Rule 16b-3
16
10.8
Section 162(m)
16
10.9
Other Plans
17
10.10
Limits of Liability
17
10.11
Governing Law
17
10.12
Severability of Provisions
17
10.13
No Funding
17
10.14
Headings
17

 
 
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LEGEND MEDIA STOCK OPTION PLAN

ARTICLE I
PURPOSE
 
The purpose of this Legend Media Stock Option Plan (the “Plan”) is to benefit
the shareholders of Legend Media, Inc., a Nevada corporation (the “Company”), by
assisting the Company to attract, retain and provide incentives to Employees and
Directors of, and non-employee Consultants to, the Company and its Affiliates,
and to align the interests of such Employees, Directors and Consultants with
those of the Company’s shareholders.  Accordingly, the Plan provides for the
granting of Incentive Stock Options and Non-Qualified Stock Options, as provided
herein, as may be best suited to the circumstances of the particular Employee,
Director or Consultant.
 
ARTICLE II
DEFINITIONS
 
The following capitalized words and phrases, when used in the text of this
document, shall have the meanings set forth below.  Except where otherwise
clearly indicated by the context, words in the masculine gender include the
feminine gender, and vice versa, and, wherever any words are used in the
singular form, they shall be construed as if they were also used in the plural
form in all cases where the plural form would so apply, and vice versa.  Any
term used herein without an initial capital letter that is used in a provision
of the Code or the Exchange Act with which the Plan must comply to meet the
requirements of such provision of the Code or the Exchange Act shall be
interpreted as having the meaning used in such provision of the Code or Exchange
Act, if necessary for the Plan to comply with such provision.  Where a
definition includes rules regarding the definition, those rules shall apply.
 
2.1
“Affiliate” shall mean any person or entity which, at the time of reference,
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company.

 
2.2
“Award” shall mean, individually or collectively, any Option.

 
2.3
“Award Agreement” shall mean a written agreement between the Company and the
Holder with respect to an Award, each of which shall constitute a part of the
Plan.

 
2.4
“Board” shall mean the Board of Directors of the Company.

 
2.5
“Cause” shall have the meaning set forth in the applicable Award Agreement or,
if not specifically defined in the Award Agreement, shall mean, with respect to
an Employee, the Employee’s (a) failure to substantially perform his duties in
connection with his employment by the Company, as determined by the Board in its
sole discretion, (b) willful engagement in conduct which is injurious to the
business or reputation of the Company, as determined by the Board in its sole
discretion, (c) violation of any Company policy, as determined by the Board in
its sole discretion, or (d) felony conviction.

 
 
 

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2.6
“Change of Control” shall mean one or more of the following:

 
 
(a)
A change in the ownership of the Company.  A change in the ownership of the
Company occurs on the date that any one person, or more than one person acting
as a group (as determined under Subsection (d), a “Group”), acquires ownership
of stock of the Company that, together with stock held by such person or Group,
constitutes more than fifty percent (50%) of the total fair market value or
total voting power of the stock of the Company.  However, if any one person or a
Group is considered to own more than fifty percent (50%) of the total fair
market value or total voting power of the stock of the Company, the acquisition
of additional stock by the same person or persons is not considered to cause a
change in the ownership of the Company (or to cause a change in the effective
control of the Company (within the meaning of Subsection (b), below)).  An
increase in the percentage of stock owned by any one person, or a Group, as a
result of a transaction in which the Company acquires its stock in exchange for
property will be treated as an acquisition of stock for purposes of this
Section.  This Subsection (a) applies only when there is a transfer of stock of
the Company (or issuance of stock of the Company) and stock in the Company
remains outstanding after the transaction (see, Subsection (c) for rules
regarding the transfer of assets of the Company).

 
 
(b)
A change in the effective control of the Company.

 
 
(1)
Notwithstanding that the Company has not undergone a change in ownership, as
described in Subsection (a), above, a change in the effective control of the
Company occurs on either of the following dates:

 
 
(A)
The date any one person, or a Group, acquires (or has acquired during the
twelve- (12-) month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Company possessing thirty
percent (30%) or more of the total voting power of the stock of the Company; or

 
 
(B)
The date a majority of members of the Company’s board of directors is replaced
during any twelve- (12-) month period by directors whose appointment or election
is not endorsed by a majority of the members of the Company’s board of directors
before the date of the appointment or election, provided that for purposes of
this paragraph (B), the term Company refers solely to (i) the corporation for
whom a Holder is performing services at the time of the Change in Control event,
(ii) the corporation that is liable for the payment of the nonqualified deferred
compensation (or all corporations liable for the payment if more than one
corporation is liable) to Holders, or (iii) a corporation that is a majority
shareholder of a corporation identified in paragraph (i) or (ii), or any
corporation in a chain of corporations in which each corporation is a majority
shareholder of another corporation in the chain, ending in a corporation
identified in paragraph (i) or (ii).

 
In the absence of an event described in paragraph (A) or (B), a change in the
effective control of the Company will not have occurred.
 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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(2)
Acquisition of additional control.  If any one person, or a Group, is considered
to effectively control the Company (within the meaning of this Subsection (b)),
the acquisition of additional control of the Company by the same person or
persons is not considered to cause a change in the effective control of the
Company (or to cause a change in the ownership of the Company within the meaning
of Subsection (a)).

 
 
(c)
A change in the ownership of a substantial portion of the Company’s assets.

 
 
(1)
A change in the ownership of a substantial portion of the Company’s assets
occurs on the date that any one person, or a Group, acquires (or has acquired
during the twelve- (12-) month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company that have a total
“gross fair market value” equal to or more than forty percent (40%) of the total
“gross fair market value” of all of the assets of the Company immediately before
such acquisition or acquisitions.  For this purpose, “gross fair market value”
means the value of the assets of the Company, or the value of the assets being
disposed of, determined without regard to any liabilities associated with such
assets.

 
 
(2)
Notwithstanding paragraph (1), there is no Change in Control event under this
Subsection (c) when there is a transfer to an entity that is controlled by the
shareholders of the transferring corporation immediately after the transfer, as
provided in this paragraph (2).  A transfer of assets by a corporation is not
treated as a change in the ownership of such assets if the assets are
transferred to:

 
 
(A)
A shareholder of the Company (immediately before the asset transfer) in exchange
for or with respect to its stock;

 
 
(B)
An entity, fifty percent (50%) or more of the total value or voting power of
which is owned, directly or indirectly, by the Company;

 
 
(C)
A person, or a Group, that owns, directly or indirectly, fifty percent (50%) or
more of the total value or voting power of all the outstanding stock of the
Company; or

 
 
(D)
An entity, at least fifty percent (50%) of the total value or voting power of
which is owned, directly or indirectly, by a person described in paragraph (C).

 
For purposes of this paragraph (2) and except as otherwise provided, a person’s
status is determined immediately after the transfer of the assets.
 
 
(d)
Persons acting as a Group.  For purposes of the definition of “Change of
Control,” persons will not be considered to be acting as a Group solely because
they purchase assets of the same corporation at the same time, or as a result of
the same public offering.  However, persons will be considered to be acting as a
Group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of assets, or similar business
transaction with the corporation.  If a person, including an entity shareholder,
owns stock in both corporations that enter into a merger, consolidation,
purchase or acquisition of stock, or similar transaction, such shareholder is
considered to be acting as a Group with other shareholders in a corporation only
to the extent of the ownership in that corporation before the transaction giving
rise to the change and not with respect to the ownership interest in the other
corporation.

 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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2.7
“Code” shall mean the Internal Revenue Code of 1986, as amended.  References in
the Plan to any section of the Code are deemed to include any amendments or
successor provisions to such section and any regulation promulgated by the U.S.
Department of Treasury under such section.

 
2.8
“Committee” shall mean a committee of not less than two (2) members of the Board
who are selected by the Board as provided in Section 4.1.

 
2.9
“Common Stock” shall mean Common Stock, par value $ .001 per share, of the
Company.

 
2.10
“Company” shall mean Legend Media, Inc., a Nevada corporation, and any successor
thereto.

 
2.11
“Consultant” shall mean any individual who is neither an Employee nor a Director
who is engaged by the Company or an Affiliate to perform consulting services
therefor.

 
2.12
“Director” shall mean an individual who is a member of the Board or a member of
the board of directors of an Affiliate but, in either case, who is not an
Employee.

 
2.13
“Effective Date” shall mean December 22, 2008.

 
2.14
“Employee” shall mean any individual who is employed as a common law employee by
the Company or an Affiliate.  The determination of whether an individual is an
Employee, an independent contractor or any other classification of worker or
service provider and the determination of whether an individual is classified as
a member of any particular classification of employees shall be made solely in
accordance with the classifications used by the Company or Affiliate, as
applicable, and shall not be dependent on, or change due to, the treatment of
the individual for any purposes under the Code, common law or any other law, or
any determination made by any court or government agency.

 
2.15
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 
2.16
“Fair Market Value” shall mean, as of any specified date, the average of the
reported high and low sales prices of the Common Stock on the stock exchange
composite tape on that date, or if no sales prices are reported on that date, on
the last preceding date on which such prices of the Common Stock are so
reported.  If the Common Stock is traded over-the-counter at the time a
determination of its Fair Market Value is required to be made hereunder, its
Fair Market Value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of the Common Stock on the
most recent date on which the Common Stock was so traded.

 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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2.17
“Family Member” shall mean any child, stepchild, grandchild, grandparent,
parent, step-parent spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the Holder’s
household (other than a tenant or the Holder), a trust in which such persons
have more than fifty percent (50%) of the beneficial interest, a foundation in
which such persons (or the Holder) control the management of assets, and any
other entity in which such persons (or the Holder) own more than fifty percent
(50%) of the voting interests.

 
2.18
“Good Reason” shall mean: (a) the material reduction of an Employee’s base
salary, (b) the material adverse change, without his or her consent, of an
Employee’s title, authority, duties or responsibilities from those immediately
prior to Change of Control, or (c) the material breach by the Company of any
material terms of the Employee’s employment which has not been cured within
thirty (30) days after a notice has been given by the Employee to the Company.  

 
2.19
“Holder” shall mean an Employee, Director or Consultant who has been granted an
Award.

 
2.20
“Incentive Stock Option” shall mean an Option which is an “incentive stock
option” within the meaning of Section 422 of the Code.

 
2.21
“Non-Qualified Stock Option” shall mean an Option which is not an Incentive
Stock Option.

 
2.22
“Option” shall mean an Award granted under Article VII of the Plan of an option
to purchase shares of Common Stock and includes both Incentive Stock Options and
Non-Qualified Stock Options.

 
2.23
“Option Agreement” shall mean a written agreement between the Company and a
Holder with respect to an Option, each of which shall constitute a part of the
Plan.

 
2.24
“Plan” shall mean the Legend Media Stock Option Plan, as set forth herein and as
amended from time to time, together with each Award Agreement.

 
2.25
“Publicly Traded” shall mean, for purposes of Sections 5.1 and 10.8, that the
Company or an Affiliate has issued any class of common equity securities
required to be registered under section 12 of the Exchange Act.

 
2.26
“Rule 16b-3” shall mean Rule 16b-3 promulgated by the Securities and Exchange
Commission under the Exchange Act, as such may be amended from time to time, and
any successor rule, regulation or statute fulfilling the same or a substantially
similar function.

 
2.27
“Section 162(m)” shall mean Section 162(m) of the Code and any related Treasury
regulations promulgated or IRS guidance issued thereunder.

 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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2.28
“Section 409A” shall mean Section 409A of the Code and any related Treasury
regulations promulgated or IRS guidance issued thereunder.

 
2.29
“Ten Percent Shareholder” shall mean an Employee who, at the time an Option is
granted to him or her, owns more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any parent corporation
or subsidiary corporations thereof (both as defined in Section 424 of the Code),
within the meaning of Section 422(b)(6) of the Code.

 
2.30
“Total and Permanent Disability” shall mean one of the following:

 
 
(a)
the inability of the Holder to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months;

 
 
(b)
the Holder is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an
accident and health plan covering employees of the Employer for whom the
Employee performs services; or

 
 
(c)
the Holder is determined to be totally disabled by the Social Security
Administration.

 
Solely with respect to Incentive Stock Options, the term shall have the meaning
set forth in Section 22(e)(3) of the Code.
 
ARTICLE III
EFFECTIVE DATE OF PLAN
 
The Plan shall be effective as of the Effective Date, provided that the Plan is
approved by the shareholders of the Company on or within twelve (12) months of
the Effective Date.
 
ARTICLE IV
ADMINISTRATION
 
4.1
Composition of Committee.  The Plan shall be administered by the Committee,
which shall be constituted so as to permit applicable Awards under the Plan to
constitute “performance-based compensation” for purposes of Section 162(m).

 
4.2
Powers.  Subject to the provisions of the Plan, the Committee shall have the
sole authority, in its discretion, to determine which individuals shall receive
an Award, the time or times when such Award shall be made, what type of Award
shall be granted, the size of the Award and the number of shares of Common Stock
which may be issued under such Award, as applicable.  In making such
determinations the Committee may take into account the nature of the services
rendered by the respective individuals, their present and potential contribution
to the Company’s (or the Affiliate’s) success and such other factors as the
Committee in its discretion shall deem relevant.

 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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4.3
Additional Powers.  In addition to the powers described elsewhere in the Plan,
the Committee specifically is given the discretionary authority and such powers
as are necessary for the proper administration of the Plan, including, but not
limited to, the duties and powers described in this Section 4.3.  Subject to the
express provisions of the Plan, the Committee is authorized to construe the Plan
and the respective Award Agreements executed hereunder, to prescribe and enforce
such rules and regulations relating to the Plan as it may deem advisable to
carry out the intent of the Plan, and to determine and amend, subject to the
provisions of Article VIII, (including but not limited to cashing out Awards,
extending the exercise period of Options and accelerating the vesting of Awards)
the terms, restrictions and provisions of each Award, including such terms,
restrictions and provisions as shall be requisite in the judgment of the
Committee to cause designated Options to qualify as Incentive Stock Options, and
to make all other determinations necessary or advisable for administering the
Plan.  The Committee may correct any defect or supply any omission or reconcile
any inconsistency in any Award Agreement in the manner and to the extent it
shall deem expedient to carry it into effect.  Except as set forth in Article
VIII, the Committee may not reduce the exercise price of any outstanding
Options.  The determinations of the Committee on any Plan matters shall be
conclusive and binding on all parties.

 
4.4
Committee Action.  In the absence of specific rules to the contrary, action by
the Committee shall require the consent of a majority of the members of the
Committee, expressed either orally at a meeting of the Committee or in writing
in the absence of a meeting.

 
4.5
No Exercise of Authority Resulting in Nonqualified Deferred
Compensation.  Notwithstanding any other provision of the Plan to the contrary,
the Committee shall not exercise its authority with respect to the Plan or any
Award in any manner that would result in such Award being considered “deferred
compensation,” within the meaning of Section 409A, so as to cause such Award or
the Plan to become subject to the requirements of Section 409A.

 
ARTICLE V
STOCK SUBJECT TO PLAN AND LIMITATIONS THEREON
 
5.1
Stock Grant and Award Limits.  The Committee may from time to time grant Awards
to one or more Employees, Directors and/or Consultants who are determined by it
to be eligible for participation in the Plan in accordance with the provisions
of Article VI.  Subject to Article VIII,

 
 
(a)
the aggregate number of shares of Common Stock that may be issued under the Plan
shall not exceed 15,000,000 shares and

 
 
(b)
the aggregate number of shares of Common Stock that may be issued under the Plan
as Incentive Stock Options, shall not exceed 15,000,000 shares.

 
Shares shall be deemed to have been issued under the Plan solely to the extent
actually issued and delivered pursuant to an Award.  To the extent that an Award
lapses or the rights of its Holder terminate, any shares of Common Stock subject
to such Award shall again be available for the grant of a new Award.
 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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Notwithstanding any provision in the Plan to the contrary, the maximum number of
shares of Common Stock that may be granted as Options under Article VII to any
one Employee, Director or Consultant during any calendar year, shall be
15,000,000 shares (subject to adjustment in the same manner as provided in
Article VIII with respect to shares of Common Stock subject to Awards then
outstanding).  If the Company is Publicly Traded, the limitation set forth in
the preceding sentence shall be applied in a manner which shall permit
compensation generated in connection with the exercise of Options to constitute
“performance-based” compensation for purposes of Section 162(m), including, but
not limited to, counting against such maximum number of shares, to the extent
required under Section 162(m), any shares subject to Options that are canceled
or repriced.
 
5.2
Stock Offered.  The stock to be offered pursuant to the grant of an Award may be
authorized but unissued Common Stock, Common Stock purchased on the open market
or Common Stock previously issued and outstanding and reacquired by the Company.

 
ARTICLE VI
ELIGIBILITY FOR AWARDS; IMPACT OF TERMINATION OF
EMPLOYMENT, DIRECTOR STATUS OR CONSULTANT STATUS ON AWARDS
 
6.1
Eligibility.  Awards made under the Plan may be granted solely to persons who,
at the time of grant, are Employees, Directors or Consultants.  An Award may be
granted on more than one occasion to the same Employee, Director or Consultant,
and, subject to the limitations set forth in the Plan, such Award may include, a
Non-Qualified Stock Option or, solely for Employees, an Incentive Stock Option.

 
6.2
Termination of Employment.  Except to the extent inconsistent with the terms of
the applicable Award Agreement and/or the provisions of Section 6.5, the
following terms and conditions shall apply with respect to the termination of a
Holder’s employment with the Company or an Affiliate, as applicable, for any
reason, including, without limitation, retirement upon or after attaining age
sixty-five (65), Total and Permanent Disability or death.

 
 
(a)
Unvested Non-Qualified Stock Options and Incentive Stock Options.  Options that
are not vested at termination of employment shall lapse.

 
 
(b)
Vested Non-Qualified Stock Options.  The Holder’s rights, if any, to exercise
any then vested and exercisable Non-Qualified Stock Options shall terminate:

 
 
(1)
If such termination is for a reason other than the Holder’s retirement upon or
after attaining age sixty-five (65), Total and Permanent Disability or death, on
the earlier of (i) ninety (90) days after the date of such termination of
employment and (ii) the expiration date of the Non-Qualified Stock Options.

 
 
(2)
If such termination is on account of the Holder’s retirement upon or after
attaining age sixty-five (65) or on account of the Holder’s Total and Permanent
Disability, the earlier of (i) one (1) year after the date of such termination
of employment and (ii) the expiration date of the Non-Qualified Stock Options.

 
 
LEGEND MEDIA STOCK OPTION PLAN
 
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(3)
If such termination is on account of the Holder’s death, the earlier of (i) one
(1) year after the date of the Holder’s death and (ii) the expiration date of
the Non-Qualified Stock Options.

 
Upon such applicable date the Holder (and such Holder’s estate, designated
beneficiary or other legal representative) shall forfeit any rights or interests
in or with respect to any such Non-Qualified Stock Options.
 
 
(c)
Vested Incentive Stock Options.  The Holder’s rights, if any, to exercise any
then vested and exercisable Incentive Stock Options shall terminate:

 
 
(1)
If such termination is for a reason other than the Holder’s Total and Permanent
Disability or death, the earlier of (i) ninety (90) days after the date of such
termination of employment and (ii) the expiration date of the Incentive Stock
Options.

 
 
(2)
If such termination is on account of the Holder’s Total and Permanent
Disability, the earlier of (i) one (1) year after the date of such termination
of employment or (ii) the expiration date of the Incentive Stock Options.

 
 
(3)
If such termination is on account of the Holder’s death, the earlier of (i) one
(1) year after the date of the Employee’s death and (ii) the expiration date of
the Incentive Stock Options.

 
Upon such applicable date the Holder (and such Holder’s estate, designated
beneficiary or other legal representative) shall forfeit any rights or interests
in or with respect to any such Incentive Stock Options.
 
6.3
Termination of Director Status.  Except to the extent inconsistent with the
terms of the applicable Award Agreement and/or the provisions of Section 6.5,
the following terms and conditions shall apply with respect to the termination
of a Holder’s Director status, for any reason, including, without limitation,
retirement upon or after attaining age sixty-five (65), Total and Permanent
Disability or death.

 
 
(a)
Unvested Non-Qualified Stock Options.  Non-Qualified Stock Options that are not
vested at termination of Director status shall lapse.

 
 
(b)
Vested Non-Qualified Stock Options.  The Holder’s rights, if any, to exercise
any then vested and exercisable Non-Qualified Stock Options shall terminate:

 
 
(1)
If such termination is for a reason other than the Holder’s retirement upon or
after attaining age sixty-five (65), Total and Permanent Disability or death, on
the earlier of (i) ninety (90) days after the date of such termination of
Director status and (ii) the expiration date of the Non-Qualified Stock Options.

 
 
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(2)
If such termination is on account of the Holder’s retirement upon or after
attaining age sixty-five (65) or on account of the Holder’s Total and Permanent
Disability, the earlier of (i) one (1) year after the date of such termination
of Director status and (ii) the expiration date of the Non-Qualified Stock
Options.

 
 
(3)
If such termination is on account of the Holder’s death, the earlier of (i) one
(1) year after the date of the Holder’s death and (ii) the expiration date of
the Non-Qualified Stock Options.

 
Upon such applicable date the Holder (and such Holder’s estate, designated
beneficiary or other legal representative) shall forfeit any rights or interests
in or with respect to any such Non-Qualified Stock Options.
 
6.4
Termination of Consultant Status.  Except to the extent inconsistent with the
terms of the applicable Award Agreement and/or the provisions of 6.5, the
following terms and conditions shall apply with respect to the termination of a
Holder’s Consultant status, for any reason:

 
 
(a)
Unvested Non-Qualified Stock Options.  Non-Qualified Stock Options that are not
vested at termination of Consultant status shall lapse.

 
 
(b)
Vested Non-Qualified Stock Options.  The Holder’s rights, if any, to exercise
any then vested and exercisable Non-Qualified Stock Options shall terminate:

 
 
(1)
If such termination is for a reason other than the Holder’s death, on the
earlier of (i) ninety (90) days after the date of such termination and (ii) the
expiration date of the Non-Qualified Stock Options.

 
 
(2)
If such termination is on account of the Holder’s death, on the earlier of
(i) one (1) year after the date of the Holder’s death and (ii) the expiration
date of the Non-Qualified Stock Options.

 
6.5
Special Termination Rule.  Except to the extent inconsistent with the terms of
the applicable Award Agreement, and notwithstanding anything to the contrary
contained in this Article VI:

 
 
(a)
If a Holder’s employment with, Director status with or Consultant status with
the Company or any Affiliate shall terminate and the Holder, during the period
of time he is permitted to exercise Options under the provisions of the Plan (as
set forth above in Sections 6.2, 6.3 and 6.4), is unable to sell Common Stock
because of the likelihood of a violation of Rule 10b-5 of the Exchange Act,
which determination shall be made in the sole discretion of the Holder, the
exercise period of the Options shall be automatically extended for a further
ninety (90) days from the date the Options would otherwise lapse as determined
pursuant to Sections 6.2, 6.3 and 6.4 above; provided, however, that Options may
not be exercised after their expiration date.

 
 
(b)
In connection with any termination of employment, Director status, or Consultant
status, the Committee has full power and authority to extend the term,
accelerate vesting, extend the exercise period or to amend any other provisions
of any Award, as it may determine in its sole discretion; provided, however, the
Committee shall not exercise its discretion under this Section 6.5 with respect
to any Award in any manner that would result in such Award being considered
“nonqualified deferred compensation,” within the meaning of Section 409A, so as
to cause such Award or the Plan to become subject to the requirements of Section
409A.

 
 
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ARTICLE VII
OPTION TERMS
 
7.1
Option Period.  The term of each Option shall be as specified in the Option
Agreement; provided, however, the term of each Incentive Stock Option shall end
no later than the tenth (10th) anniversary of such Option’s date of grant.

 
7.2
Limitations on Exercise of Option; Vesting.  An Option shall be exercisable in
whole or in such installments and at such times as specified in the Option
Agreement.

 
7.3
Special Limitations on Incentive Stock Options.  

 
 
(a)
To the extent that the aggregate Fair Market Value (determined at the time the
respective Incentive Stock Option is granted) of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by an
individual during any calendar year under all plans of the Company and any
parent corporation or subsidiary corporation thereof (both as defined in Section
424 of the Code) which provide for the grant of Incentive Stock Options exceeds
One Hundred Thousand Dollars ($100,000) (or such other individual limit as may
be in effect under the Code on the date of grant), such Incentive Stock Options
shall be treated as Non-Qualified Stock Options.  The Committee shall determine,
in accordance with applicable provisions of the Code, Treasury Regulations and
other administrative pronouncements, which of a Holder’s Options, which were
intended by the Committee to be Incentive Stock Options when granted to the
Holder, will not constitute Incentive Stock Options because of such limitation
and shall notify the Holder of-such determination as soon as practicable after
such determination.

 
 
(b)
No Incentive Stock Option shall be granted to an Employee if, at the time the
Option is granted, such Employee is a Ten Percent Shareholder, unless (1) at the
time such Incentive Stock Option is granted the Option exercise price is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock subject to the Option, and (2) such Incentive Stock Option by its terms is
not exercisable after the expiration of five (5) years from the date of grant.

 
 
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7.4
Option Agreement.  Each Option shall be evidenced by an Option Agreement in such
form and containing such provisions not inconsistent with the provisions of the
Plan as the Committee from time to time shall approve, including, but not
limited to, provisions to qualify an Option as an Incentive Stock Option.  In no
event shall an Option be, or result in being, back-dated.  An Option Agreement
may provide for the payment of the Option exercise price, in whole or in part,
by the delivery of a number of shares of Common Stock (plus cash if necessary)
having a Fair Market Value equal to such Option exercise price.  Each Option
Agreement shall, solely to the extent inconsistent with the provisions of
Sections 6.2, 6.3 and 6.4, as applicable, specify the effect of termination of
employment, Director status or Consultant status on the exercisability of the
Option.  Moreover, an Option Agreement may provide for a “cashless exercise” of
the Option by establishing procedures whereby the Holder, by a properly-executed
written notice, directs (a) an immediate market sale or margin loan respecting
all or a part of the shares of Common Stock to which he is entitled upon
exercise pursuant to an extension of credit by the Company to the Holder of the
Option exercise price, (b) the delivery of the shares of Common Stock from the
Company directly to a brokerage firm and (c) the delivery of the Option exercise
price from sale or margin loan proceeds from the brokerage firm directly to the
Company.  An Option Agreement may also include provisions relating to
(a) subject to the provisions hereof, accelerated vesting of Options, (b) tax
matters (including provisions covering any applicable Employee wage withholding
requirements and requiring additional “gross-up” payments to Holders to meet any
excise taxes or other additional income tax liability imposed as a result of a
payment upon a Change of Control resulting from the operation of the Plan or of
such Option Agreement) and (c) any other matters not inconsistent with the terms
and provisions of the Plan that the Committee shall in its sole discretion
determine.  The terms and conditions of the respective Option Agreements need
not be identical.  Notwithstanding any other provision of the Plan to the
contrary, an Option Agreement shall not contain any provision that would result
in such Option being considered “nonqualified deferred compensation,” within the
meaning of Section 409A, so as to cause such Option or the Plan to become
subject to the requirements of Section 409A.

 
7.5
Option Exercise Price and Payment.  The price at which a share of Common Stock
may be purchased upon exercise of an Option shall be determined by the
Committee, but such Option exercise price (a) in the case of an Option that is
an Incentive Stock Option or that is intended to constitute performance-based
compensation within the meaning of Section 162(m), shall not be less than the
Fair Market Value of a share of Common Stock on the date such Option is granted
and (b) shall be subject to adjustment as provided in Article VIII.  The Option
or portion thereof may be exercised by delivery of an irrevocable notice of
exercise to the Company, which notice shall be in a form acceptable to the
Company.  The Option exercise price for the Option or portion thereof shall be
paid in full in the manner prescribed by the Committee.  Separate stock
certificates shall be issued by the Company for those shares of Common Stock
acquired pursuant to the exercise of an Incentive Stock Option and for those
shares of Common Stock acquired pursuant to the exercise of a Non-Qualified
Stock Option.

 
7.6
Shareholder Rights and Privileges.  The Holder of an Option shall be entitled to
all the privileges and rights of a shareholder of the Company solely with
respect to such shares of Common Stock as have been purchased under the Option
and for which certificates of stock have been registered in the Holder’s name.

 
7.7
Options and Rights in Substitution for Stock Options Granted by Other
Corporations.  Options may be granted under the Plan from time to time in
substitution for stock options held by individuals employed by entities who
become Employees as a result of a merger or consolidation of the employing
entity with the Company or any Affiliate, or the acquisition by the Company or
an Affiliate of the assets of the employing entity, or the acquisition by the
Company or an Affiliate of stock of the employing entity with the result that
such employing entity becomes an Affiliate; provided, however, such grant is not
made in a manner that would result in the Option being considered “nonqualified
deferred compensation,” within the meaning of Section 409A, so as to cause such
Option or the Plan to become subject to the requirements of Section 409A.

 
 
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ARTICLE VIII
RECAPITALIZATION OR REORGANIZATION
 
8.1
Adjustments to Common Stock.  The shares with respect to which Awards may be
granted are shares of Common Stock as presently constituted; provided, however,
that if, and whenever, prior to the expiration or distribution to the Holder of
an Award theretofore granted, the Company shall effect a subdivision or
consolidation of shares of Common Stock or the payment of a stock dividend on
Common Stock without receipt of consideration by the Company, the number of
shares of Common Stock with respect to which such Award may thereafter be
exercised or satisfied, as applicable, (a) in the event of an increase in the
number of outstanding shares, shall be proportionately increased, and the
purchase price per share shall be proportionately reduced, and (b) in the event
of a reduction in the number of outstanding shares, shall be proportionately
reduced, and the purchase price per share shall be proportionately
increased.  Notwithstanding the foregoing, any such adjustment made with respect
to an Award which is an Incentive Stock Option shall comply with the
requirements of Section 424(a) of the Code, and in no event shall any such
adjustment be made which would render any Incentive Stock Option granted under
the Plan to be other than an “incentive stock option” for purposes of Section
422 of the Code.

 
8.2
Recapitalization.  If the Company recapitalizes or otherwise changes its capital
structure, thereafter upon any exercise or satisfaction, as applicable, of a
previously granted Award, the Holder shall be entitled to receive (or entitled
to purchase, if applicable) under such Award, in lieu of the number of shares of
Common Stock then covered by such Award, the number and class of shares of stock
and securities to which the Holder would have been entitled pursuant to the
terms of the recapitalization if, immediately prior to such recapitalization,
the Holder had been the holder of record of the number of shares of Common Stock
then covered by such Award.

 
8.3
Change of Control.  Except to the extent otherwise provided in the applicable
Award Agreement, in the event of the occurrence of a Change of Control, and
within one (1) year following the Change of Control (a) an Employee’s employment
is terminated by the Company without Cause or by the Employee with Good Reason
or (b) a Director is removed from the Board without the approving vote of a
majority of the directors in office immediately prior to the Change of Control,
outstanding Awards of the Employee or Director, as the case may be, shall
immediately vest and become exercisable and/or required employment or Board
membership periods with the Company or an Affiliate and/or performance goals
and/or objectives shall be deemed to have been fully satisfied, as
applicable.  The Committee, in its discretion by unanimous action, may determine
that upon the occurrence of a Change of Control, each Award outstanding
hereunder shall terminate within a specified number of days after notice to the
Holder, and such Holder shall receive, with respect to each share of Common
Stock subject to such Award, cash in an amount equal to the excess of (i) the
greater of (A) the Fair Market Value of such share of Common Stock immediately
prior to the occurrence of such Change of Control or (B) the value of the
consideration to be received in connection with such Change of Control for one
share of Common Stock, over (ii) the exercise price per share, if applicable, of
one share of Common Stock.  If the consideration offered to shareholders of the
Company in any transaction described in this Section 8.3 consists of anything
other than cash, the Committee shall determine the fair cash equivalent of the
portion of the non-cash consideration offered.  The provisions contained in this
Section 8.3 shall not terminate any rights of the Holder to further payments
pursuant to any other agreement with the Company following the occurrence of a
Change of Control.  The provisions contained in this Section 8.3 do not apply to
Consultants.

 
 
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8.4
Other Events.  In the event of changes to the outstanding Common Stock by reason
of recapitalization, reorganization, mergers, consolidations, combinations,
exchanges or other relevant changes in capitalization occurring after the date
of the grant of any Award and not otherwise provided for under this Article
VIII, any outstanding Awards and any Award Agreements evidencing such Awards
shall be subject to adjustment by the Committee in its discretion as to the
number and price of shares of Common Stock or other consideration subject to
such Awards.  In the event of any such change to the outstanding Common Stock,
the aggregate number of shares available under the Plan may be appropriately
adjusted by the Committee, the determination of which shall be conclusive.

 
8.5
Powers Not Affected.  The existence of the Plan and the Awards granted hereunder
shall not affect in any way the right or power of the Board or of the
shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change of the Company’s capital
structure or business, any merger or consolidation of the Company, any issue of
debt or equity securities ahead of or affecting Common Stock or the rights
thereof, the dissolution or liquidation of the Company or any sale, lease,
exchange or other disposition of all or any part of its assets or business or
any other corporate act or proceeding.

 
8.6
No Adjustment for Certain Awards.  Except as hereinabove expressly provided, the
issuance by the Company of shares of stock of any class or securities
convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe
therefor or upon conversion of shares or obligations of the Company convertible
into such shares or other securities, and in any case whether or not for fair
market value, shall not affect previously granted Awards, and no adjustment by
reason thereof shall be made with respect to the number of shares of Common
Stock subject to Awards theretofore granted or the purchase price per share, if
applicable.

 
8.7
No Adjustment to Result in Nonqualified Deferred Compensation.  Notwithstanding
any other provision of the Plan to the contrary, no adjustment shall be made to
any outstanding Award under the Plan that would result in such Award being
considered “nonqualified deferred compensation,” within the meaning of Section
409A, so as to cause such Award or the Plan to become subject to the
requirements of Section 409A.

 
 
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ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
 
9.1
Amendment.  At any time and from time to time, the Board shall have the right to
alter or amend the Plan and the Committee shall have the right to amend any
Awards, or any part hereof or thereof, whether or not vested, from time to
time.  

 
9.2
Termination.  The Board in its sole discretion may terminate the Plan at any
time with respect to any shares for which Awards have not theretofore been
granted.

 
ARTICLE X
MISCELLANEOUS
 
10.1
No Right to Award.  Neither the adoption of the Plan by the Company nor any
action of the Board or the Committee shall be deemed to give an Employee,
Director or Consultant any right to an Award except as may be evidenced by an
Award Agreement duly executed on behalf of the Company, and then solely to the
extent and on the terms and conditions expressly set forth therein.

 
10.2
No Rights Conferred.  Nothing contained in the Plan shall

 
 
(a)
confer upon any Employee any right with respect to continuation of employment
with the Company or any Affiliate,

 
 
(b)
interfere in any way with the right of the Company or any Affiliate to terminate
the employment of an Employee at any time,

 
 
(c)
confer upon any Director any right with respect to continuation of such
Director’s membership on the Board,

 
 
(d)
interfere in any way with the right of the Company or an Affiliate to terminate
a Director’s membership on the Board at any time,

 
 
(e)
confer upon any Consultant any right with respect to continuation of his or her
consulting engagement with the Company or any Affiliate, or

 
 
(f)
interfere in any way with the right of the Company or an Affiliate to terminate
a Consultant’s consulting engagement with the Company or an Affiliate at any
time.

 
10.3
Other Laws; Withholding.  The Company shall not be obligated to issue any Common
Stock pursuant to any Award granted under the Plan at any time when the shares
covered by such Award have not been registered under the Securities Act of 1933,
as amended, and such other state and federal laws, rules or regulations as the
Company or the Committee deems applicable and, in the opinion of legal counsel
of the Company, there is no exemption from the registration requirements of such
laws, rules or regulations available for the issuance and sale of such
shares.  No fractional shares of Common Stock shall be delivered, nor shall any
cash in lieu of fractional shares be paid.  The Company shall have the right to
deduct in cash (whether under this Plan or otherwise) in connection with all
Awards any taxes required by law to be withheld and to require any payments
required to enable it to satisfy its withholding obligations.  In the case of
any Award satisfied in the form of shares of Common Stock, no shares shall be
issued unless and until arrangements satisfactory to the Company shall have been
made to satisfy any tax withholding obligations applicable with respect to such
Award.  Subject to such terms and conditions as the Committee may impose, the
Company shall have the right to retain, or the Committee may, subject to such
terms and conditions as it may establish from time to time, permit Holders to
elect to tender Common Stock or have the Company withhold shares of Common Stock
to satisfy, in whole or in part, the employer’s minimum statutory withholding
(based on minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes, that are applicable to such supplemental
taxable income).

 
 
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10.4
No Restriction on Corporate Action.  Nothing contained in the Plan shall be
construed to prevent the Company or any Affiliate from taking any corporate
action which is deemed by the Company or such Affiliate to be appropriate or in
its best interest, whether or not such action would have an adverse effect on
the Plan or any Award made under the Plan.  No Employee, Director, Consultant,
beneficiary or other person shall have any claim against the Company or any
Affiliate as a result of any such action.

 
10.5
Restrictions on Transfer.  Subject to the terms of the Award Agreement, no Award
under the Plan or any Award Agreement and no rights or interests herein or
therein, shall or may be assigned, transferred, sold, exchanged, encumbered,
pledged or otherwise hypothecated or disposed of by a Holder except (a) by will
or by the laws of descent and distribution or (b) except for an Incentive Stock
Option, by gift to any Family Member of the Holder.  Subject to the terms of the
Award Agreement, an Award may be exercisable during the lifetime of the Holder
only by such Holder or by the Holder’s guardian or legal representative unless
it has been transferred by gift to a Family Member of the Holder, in which case
it shall be exercisable solely by such transferee.  Notwithstanding any such
transfer, the Holder shall continue to be subject to the withholding
requirements provided for under Section 10.3 hereof.

 
10.6
Beneficiary Designations.  Each Holder may, from time to time, name a
beneficiary or beneficiaries (who may be contingent or successive beneficiaries)
for purposes of receiving any amount which is payable in connection with an
Award under the Plan upon or subsequent to the Holder’s death.  Each such
beneficiary designation shall serve to revoke all prior beneficiary
designations, be in a form prescribed by the Company and be effective solely
when filed by the Holder in writing with the Company during the Holder’s
lifetime.  In the absence of any such written beneficiary designation, for
purposes of the Plan, a Holder’s beneficiary shall be the Holder’s estate.

 
10.7
Rule 16b-3.  It is intended that, at any time the Company is Publicly Traded,
the Plan and any Award made to a person subject to Section 16 of the Exchange
Act shall meet all of the requirements of Rule 16b-3.  If any provision of the
Plan or of any such Award would disqualify the Plan or such Award under, or
would otherwise not comply with the requirements of, Rule 16b-3, such provision
or Award shall be construed or deemed to have been amended as necessary to
conform to the requirements of Rule 16b-3.

 
10.8
Section 162(m).  It is intended that, at any time when the Common Stock is
Publicly Traded, the Plan shall comply fully with and meet all the requirements
of Section 162(m) so that Awards hereunder which are made to Holders who are
“covered employees” (as defined in Section 162(m)) shall constitute
“performance-based” compensation within the meaning of Section 162(m).  The
performance criteria to be utilized under the Plan for such purposes shall
consist of objective tests based on one or more of the following:  earnings or
earnings per share, cash flow, customer satisfaction, revenues, financial return
ratios (such as return on equity and/or return on assets), market performance,
shareholder return and/or value, operating profits, EBITDA, net profits, profit
returns and margins, stock price, credit quality, sales growth, market share,
comparisons to peer companies (on a company-wide or divisional basis), working
capital and/or individual or aggregate employee performance.  At such time the
Company is Publicly Traded, if any provision of the Plan would disqualify the
Plan or would not otherwise permit the Plan to comply with Section 162(m) as so
intended, such provision shall be construed or deemed amended to conform to the
requirements or provisions of Section 162(m).

 
 
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10.9
Other Plans.  No Award, payment or amount received hereunder shall be taken into
account in computing an Employee’s salary or compensation for the purposes of
determining any benefits under any pension, retirement, life insurance or other
benefit plan of the Company or any Affiliate, unless such other plan
specifically provides for the inclusion of such Award, payment or amount
received.

 
10.10
Limits of Liability.  Any liability of the Company with respect to an Award
shall be based solely upon the contractual obligations created under the Plan
and the Award Agreement.  Neither the Company nor any member of the Committee
shall have any liability to any party for any action taken or not taken, in good
faith, in connection with or under the Plan.

 
10.11
Governing Law.  Except as otherwise provided herein, the Plan shall be construed
in accordance with the laws of the State of Nevada.

 
10.12
Severability of Provisions.  The provisions of the Plan are severable.  If any
provision of the Plan is held invalid or unenforceable in whole or in part by a
court of competent jurisdiction, then solely for the purposes of the
jurisdiction of that court, such provision shall be invalid or unenforceable and
shall not in any manner affect such provision in any other jurisdiction, or any
other provision of the Plan in any way, and the Plan shall be construed and
enforced accordingly.

 
10.13
No Funding.  The Plan shall be unfunded.  The Company shall not be required to
establish any special or separate fund or to make any other segregation of funds
or assets to ensure the payment of any Award.

 
10.14
Headings.  Headings used throughout the Plan are for convenience only and shall
not be given legal significance.

 
Adopted by the Board on December 5, 2008.
 
 
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