Exhibit 10.6.1

DILIGENT BOARD MEMBER SERVICES, INC.
2010 STOCK OPTION AND INCENTIVE PLAN

Adopted by the Board: April 22, 2010
 
Adopted by the Shareholders: June 8, 2010
 
ARTICLE I. PURPOSE.
 
1.1.           The purpose of the Plan is to provide a means by which selected
Employees, Directors and Consultants of the Company, and its Affiliates, are
incented to perform through the opportunity to benefit from increases in value
of the Common Stock of the Company from grants of Options in the Company’s
Common Stock.
 
1.2.           The Company, by means of the Plan, seeks to retain the services
of persons who are now Employees, Directors, or Consultants to the Company or
its Affiliates, to secure and retain the services of new Employees, Directors
and Consultants, and to provide incentives for such persons to exert maximum
efforts for the success of the Company and its Affiliates.
 
1.3.           All Options granted under the Plan shall be separately designated
as Incentive Stock Options or Non-Qualified Stock Options at the time of grant,
and in such form as issued pursuant to Article VI, and the number of shares of
common stock will be listed in the name of the Employee, Director or Consultant
in the Company’s stock records for shares purchased on exercise of each type of
Option by said individual .
 
ARTICLE II. DEFINITIONS.
 
“Act” means the Securities Act of 1933, as amended.
 
“Affiliate” means any parent corporation or subsidiary corporation of the
Company, whether now or hereafter existing, as those terms are defined in
Sections 424(e) and (f) respectively, of the Code.
 
“Award” means the grant of an Option.
 
“Board” means the Board of Directors of the Company.
 
“Code” means the Internal Revenue Code of 1986, as amended, and any Internal
Revenue Code adopted in the future to replace the Internal Revenue Code of 1986.
 
“Committee” means the Remuneration and Nominations Committee or any other
committee appointed by the Board in accordance with subsection C of Article III
to administer the Plan. The Committee shall be composed of outside directions
only.

 
 

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“Common Stock” means shares of the Company’s common stock, par value $0.001 per
share.
 
“Company” means Diligent Board Member Services, Inc., a Delaware corporation.
 
“Consultant” means any person, including an advisor, engaged by the Company or
an Affiliate to render consulting or other personal services as an independent
contractor and who is compensated for such services, provided that the term
“Consultant” shall not include Directors.
 
“Continuous Status as an Employee, Director or Consultant” means that the
provision of services to the Company or an Affiliate in the capacity of
Employee, Director or Consultant, is not interrupted or terminated. Continuous
Status as an Employee, Director or Consultant shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
between locations of the Company or among the Company, any Affiliate, or any
successor, in any capacity as Employee, Director or Consultant, or (iii) any
change in status as long as the person remains in the service of the Company,
Affiliate or successor in any capacity as an Employee, Director, Consultant
(except as otherwise provided in the Option Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized
personal leave approved by the Company; provided, however, that any such
authorized leave of absence shall be treated as Continuous Status as an
Employee, Director, or Consultant for the purposes of vesting only to the extent
as may be provided in the Company’s leave policy. For purposes of Incentive
Stock Options, no such leave may exceed ninety (90) days, unless reemployment
upon expiration of such leave is guaranteed by statute or contract.
Notwithstanding anything to the contrary in this definitional paragraph, a
Consultant’s status shall not be considered continuous unless the Consultant is
and continues to be ready, willing and able to engage in substantial services to
the Company. The Board, in its sole discretion, shall in all cases determine
whether Continuous Status as an Employee, Director or Consultant shall be
considered interrupted or terminated.
 
“Covered Employee” means any person who, on the last day of the taxable year, is
the chief executive officer (or is acting in such capacity) or is among the four
most highly compensated officers (other than the chief executive officer) of the
Company for whom total compensation is required to be reported to stockholders
under the Exchange Act, as determined for purposes of Section 162(m) of the
Code.
 
“Director” means a member of the Board or of the board of directors of an
Affiliate.
 
“Employee” means any person, including Officers and Executive Directors,
employed by the Company or any Affiliate of the Company as determined under the
rules contained in Code Section 3401. Neither service as a Director nor payment
of a director’s fee by the Company shall be sufficient by itself to constitute
“employment” by the Company.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Executive Director” means an individual who is an officer of the Company and
also serves as a member of the Board of Directors.

 
 

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“Fair Market Value” means, as of any date, the value of the Common Stock of the
Company determined as follows:
 
(a)           If the Common Stock is readily tradable on an established
securities market, the fair market value of the Common Stock on the date of
grant means the value determined based upon the last sale before or the first
sale after the grant, the closing price on the trading day before or the trading
day of the grant of the Award, or any other reasonable basis using actual
transactions in the Common Stock as reported by such market and consistently
applied.
 
(b)           If the Common Stock is not readily tradable on an established
securities market, the fair market value of the Common Stock on the date of
grant means the value determined by a valuation of the Common Stock determined
by an independent appraisal that meets the requirements of Section 401(a)(28)(C)
of the Code and the regulations thereunder as of a date that is no more than 12
months before the relevant Option grant date.
 
“Incentive Stock Option” means an Option intended to qualify as an incentive
stock option (as set forth in the Option Agreement) and that qualifies as an
Incentive Stock Option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
 
“Non-Qualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option (as set forth in the Option Agreement) or that does not
qualify as an Incentive Stock Option.
 
“Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.
 
“Option” means an option for the Company’s common stock granted pursuant to the
Plan.
 
“Option Agreement” means a written agreement between the Company and a Recipient
evidencing the terms and conditions of an individual Option grant. The Option
Agreement shall be in the form approved by the Board from time to time. Each
Option Agreement shall be subject to the terms and conditions of the Plan.
 
“Outside Director” means a Director who (i) is not a current employee of the
Company or an “affiliated corporation” (within the meaning of Treasury
regulations promulgated under Section 162(m) of the Code), (ii) is not a former
employee of the Company or an “affiliated corporation” receiving compensation
for prior services (other than benefits under a tax qualified pension plan)
during the taxable year, (iii) has not been an officer of the Company or an
“affiliated corporation” at any time, (iv) is not currently receiving direct or
indirect remuneration (including any payment in exchange for goods or services)
from the Company or an “affiliated corporation” in any capacity other than as a
Director, (v) is otherwise considered an “outside director” for purposes of
Section 162(m) of the Code, a “non-employee director” for purposes of Rule 16b-3
under the Exchange Act.

 
 

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“Plan” means this Diligent Board Member Services, Inc. 2010 Stock Option and
Incentive Plan.
 
“Purchase Price” is defined in Subsection C of Article VI.
 
“Recipient” means an Employee, Director or Consultant, or their transferees, who
holds an outstanding Option.
 
 “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule
16b-3, as in effect when discretion is being exercised with respect to the Plan.
 
ARTICLE III. ADMINISTRATION.
 
1.4.        The Plan shall be administered by the Board unless and until the
Board delegates administration to the Committee, as provided in subsection C of
this Article III.
 
1.5.        The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
 
(a)           To determine, in its sole discretion, from time to time which of
the persons eligible under the Plan shall be granted an Award; when and how each
Award shall be granted; whether an Option granted will be an Incentive Stock
Option or a Non-Qualified Stock Option, or a combination of the foregoing; the
provisions of each Award granted (which need not be identical), including the
time or times when a person shall be permitted to receive stock pursuant to an
Award; the number of shares with respect to which an Award shall be granted to
each such person; and all other terms, conditions and restrictions applicable to
each such Award or shares acquired upon exercise of an Option not inconsistent
with the terms of the Plan.
 
(b)           To approve one or more forms of Option Agreement.
 
(c)           To construe and interpret, in its sole discretion, the Plan and
Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Option
Agreement, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
 
(d)           To amend, modify or otherwise change in any manner the Plan or an
Award as provided in Article XII and to suspend or terminate the Plan as
provided in Article XIII.
 
(e)           Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the Company
that are not in conflict with the provisions of the Plan.
 
All decisions, determinations and interpretations of the Board shall be final,
binding and conclusive on any Recipient and any other person with an interest in
the Plan or in an Award and on any Affiliate.

 
 

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1.6.          The Board hereby delegates administration of the Plan to the
Committee which will be composed of not fewer than two (2) of its members.
Furthermore, notwithstanding anything in this Article III to the contrary, the
Board hereby delegates to the Committee the exclusive right and authority to
award Options to an eligible person who is a Covered Employee or who is expected
to be a Covered Employee at the time of recognition of income resulting from
such Award with respect to either of whom the Company wishes to avoid the
application of Section 162(m) of the Code.
 
The Committee shall have, during such delegation and in connection with the
administration of the Plan, the powers theretofore possessed by the Board (and
references in this Plan to the Board shall thereafter be to the Committee),
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. Administration of
the Plan shall encompass, among other things, determining potential optionees,
establishing the terms of each option, ensuring all proposed grants are
consistent with the terms of the Plan, granting the options and ensuring the
Corporate Secretary keeps accurate records of options granted and exercised.
 
The Board may withdraw administration of the Plan from the Committee at any
time. The Board may abolish the Committee at any time and, upon abolition
administration of the Plan shall revert automatically, without any further
action on the Board's part, to the Board.
 
1.7.          Notwithstanding anything in this Article III to the contrary, at
any time the Board may also delegate to any proper Officer the authority to
grant Awards, without further approval of the Board, to eligible persons who (i)
are not then subject to Section 16 of the Exchange Act and (ii) are either (A)
not then Covered Employees and are not expected to be Covered Employees at the
time of recognition of income resulting from such Award, or (B) not persons with
respect to whom the Company wishes to avoid the application of Section 162(m) of
the Code; provided, however, that (i) the exercise price per share of each
Option Award shall be equal to the Fair Market Value of such stock at the date
of grant, and (ii) each Option Award shall be subject to the terms and
conditions of the standard form of Option Agreement approved by the Board and
shall conform to the provisions of the Plan and such other guidelines as shall
be established from time to time by the Board.
 
1.8.          No member of the Board or of any committee constituted under this
Article III or any Officer acting pursuant to this Article shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or any Award.
 
ARTICLE IV. SHARES SUBJECT TO THE PLAN.
 
1.9.          Subject to the provisions of Article XI relating to adjustments
upon changes in stock, the amount of stock that may be issued pursuant to Awards
shall not exceed in the aggregate five million (5,000,000) shares of the
Company’s Common Stock. If any Award shall for any reason expire or otherwise
terminate, in whole or in part, without having been exercised in full, the
shares not acquired underlying such Award shall revert to and again become
available for issuance under the Plan. 

 
 

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1.10.        The Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
 
ARTICLE V. ELIGIBILITY.
 
1.11.        Incentive Stock Options may be granted to Employees. Non-Qualified
Stock Options may be granted only to Employees, Directors or Consultants.
 
1.12.        No person shall be eligible for the grant of an Incentive Stock
Option if, at the time of grant, such person owns (or is deemed to own pursuant
to Section 424(d) of the Code) stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company, or of
any of its Affiliates (a “Ten Percent Stockholder”), unless the exercise price
of such Option is at least one hundred ten percent (110%) of the Fair Market
Value of such stock at the date of grant and the Option is not exercisable after
the expiration of five (5) years from the date of grant.
 
1.13.        To the extent that the aggregate Fair Market Value (determined at
the time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Recipient during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such limit (according
to the order in which they were granted) shall be treated as Non-Qualified Stock
Options.
 
1.14.        Subject to the provisions of Article XI relating to adjustments
upon changes in stock, no person shall be eligible to be granted Awards covering
more than five hundred thousand (500,000) shares of the Common Stock in any
calendar year.
 
ARTICLE VI. TERMS OF OPTIONS.
 
Each Option shall be evidenced by an Option Agreement in such form and shall
contain such terms and conditions as the Board shall deem appropriate. No Option
or purported Option shall be a valid and binding obligation of the Company
unless evidenced by a fully executed Option Agreement or by communicating with
the Company in such manner as the Company may authorize. The provisions of
separate Options need not be identical, but each Option shall include (through
incorporation of provisions hereof or as specifically set forth in the Option
Agreement or otherwise) the substance of each of the following provisions:
 
1.15.        Term. No Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date it was granted. However, in the case
of an Incentive Stock Option granted to a Recipient who, at the time the Option
is granted, is a Ten Percent Stockholder (as described in subsection B of
Article V), the term of the Option shall be five (5) years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.
 
1.16.        Price. The exercise price of each Option shall be not less than one
hundred percent (100%) of the Fair Market Value of the stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Non-Qualified Stock Option) may
be granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.

 
 

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1.17.        Consideration. The purchase price of stock acquired pursuant to an
Option (the “Purchase Price”) shall be paid, to the extent permitted by
applicable statutes and regulations, either (i) in cash or check at the time the
Option is exercised, or (ii) as set forth in the Option Agreement (or in the
case of a Non-Qualified Stock Option, as subsequently determined in the
discretion of the Board or the Committee) (A) in shares of Common Stock duly
endorsed over to the Company (which shares shall have been owned by the Option
holder for at least six (6) months prior to such exercise and, for purposes of
this paragraph, be valued at their Fair Market Value as of the business day
immediately preceding the date of such exercise), (B) by written direction to an
authorized broker to sell the shares of Common Stock purchased pursuant to such
exercise immediately for the account of the Option holder and pay an appropriate
portion of the proceeds thereof to the Company, (C) according to a deferred
payment or other arrangement (which may include, without limiting the generality
of the foregoing, the use of other Common Stock of the Company) with the
Recipient in any other form of legal consideration that may be acceptable to the
Board, or (D) any combination of such methods of payment which together amount
to the full exercise price of the shares purchased pursuant to the exercise of
the Option. For purposes of this subsection C, the Purchase Price shall include
the amount of the full exercise price of the shares of the Common Stock
purchased pursuant to the exercise of the Option plus the minimum amount, if
any, of any applicable taxes which the Company is required to withhold.
 
In the case of any deferred payment arrangement approved by the Board, interest
shall be payable at least annually and shall be charged at the minimum rate of
interest necessary to avoid the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement. No deferred payment arrangement shall be
permitted if the exercise of an Option for such a deferred payment would be a
violation of any law or cause the Plan to be deemed a "nonqualified deferred
compensation plan", as defined in Section 409A of the Code.
 
1.18.        Transferability. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution, and
shall be exercisable during the lifetime of the Recipient only by such Recipient
or by his attorney-in-fact or conservator, unless such exercise by the
attorney-in-fact or the conservator of the Recipient would disqualify the
Incentive Stock Option as such. Unless the Board otherwise specifies, a
Non-Qualified Stock Option shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime of
the Recipient only by such person or by his attorney-in-fact or conservator.
Notwithstanding the foregoing, the Recipient may, by delivering written notice
to the Company, in a form satisfactory to the Company, designate a third party
who, in the event of the death of the Recipient, shall thereafter be entitled to
exercise the Option.

 
 

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1.19.        Vesting. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable (“vest”)
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. The Option may be subject to such other terms and conditions on the
time or times when it may be exercised (which may be based on performance or
other criteria) as the Board may deem appropriate. Unless otherwise specified in
an Option Agreement, the shares of stock underlying an Option grant shall vest
in three equal amounts: the first installment will be first exercisable on the
six (6)-month anniversary of the option grant date and each succeeding
installment will be first exercisable one (1) year from the date that the
immediately preceding installment became exercisable. Any vesting schedule can
be accelerated in the discretion of the Board, unless otherwise specified in the
Option Agreement.
 
1.20.        Termination of Employment or Relationship as a Director or
Consultant. In the event a Recipient’s Continuous Status as an Employee,
Director or Consultant terminates (other than upon the Recipient’s death or
disability), the Recipient may exercise his or her Option (to the extent that
the Recipient was entitled to exercise it at the date of termination) but only
within such period of time ending on the earlier of (i) the date three (3)
months after the termination of the Recipient’s Continuous Status as an
Employee, Director or Consultant (or, such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Recipient is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Recipient does not
exercise his or her Option within the time specified in the Option Agreement or
in this Plan, the Option shall terminate, and the shares covered by such Option
shall revert to and again become available for issuance under the Plan. The
above terms shall apply only if the specific Option grant is silent on the above
issues; however, a specific Option grant may provide for different terms in the
event a Recipient’s Continuous Status as an Employee, Director or Consultant
terminates (other than upon the Recipient’s death or disability).
 
1.21.        Disability of Recipient. In the event a Recipient’s Continuous
Status as an Employee, Director or Consultant terminates as a result of the
Recipient’s disability, as defined in Section 22(e)(3) of the Code, the
Recipient may exercise his or her Option (to the extent that the Recipient was
entitled to exercise it at the date of termination), but only within such period
of time ending on the earlier of (i) the date twelve (12) months following such
termination (or, such longer or shorter period specified in the Option
Agreement), or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, at the date of termination of Continuous Status, the
Recipient is not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan. If, after termination, the
Recipient does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the shares covered by such Option shall revert
to and again become available for issuance under the Plan. The above terms shall
apply only if the specific Option grant is silent on the above issues; however,
a specific Option grant may provide for different terms in the event a
Recipient’s Continuous Status as an Employee, Director or Consultant terminates
as a result of the Recipient’s disability.

 
 

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1.22.        Death of Recipient. In the event of the death of a Recipient
during, or within a period specified in the Option after the termination of, the
Recipient’s Continuous Status as an Employee, Director or Consultant, the Option
may be exercised (to the extent the Recipient was entitled to exercise the
Option at the date of death) by the Recipient’s estate, by a person who acquired
the right to exercise the Option by bequest or inheritance or by a person
designated to exercise the option upon the Recipient’s death pursuant to
subsection D of Article VI, but only within the period ending on the earlier of
(i) the date twelve (12) months following the date of death (or, such longer or
shorter period specified in the Option Agreement), or (ii) the expiration of the
term of such Option as set forth in the Option Agreement. If, at the time of
death, the Recipient was not entitled to exercise his or her entire Option, the
shares covered by the unexercisable portion of the Option shall revert to and
again become available for issuance under the Plan. If, after death, the Option
is not exercised within the time specified herein, the Option shall terminate,
and the shares covered by such Option shall revert to and again become available
for issuance under the Plan. The above terms shall apply only if the specific
Option grant is silent on the above issues; however, a specific Option grant may
provide for different terms in the event a Recipient’s Continuous Status as an
Employee, Director or Consultant terminates as a result of the Recipient’s
death.
 
1.23.        Responsibility for Option Exercise. A Recipient is responsible for
taking any and all actions as may be required to exercise any Option in a timely
manner, and for properly executing any documents as may be required for the
exercise of an Option in accordance with such rules and procedures as may be
established from time to time under the Plan. By signing or accepting an Option
Agreement a Recipient (and any person to whom the Option under that Option
Agreement is transferred) acknowledges that information regarding the procedures
and requirements for the exercise of that Option is available upon such
Recipient’s or person’s request to the Board. The Company shall have no duty or
obligation to notify any Recipient of the expiration of any Option.
 
ARTICLE VII. REPRICING, CANCELLATION AND RE-GRANT
OF OPTIONS.
 
The Board or the Committee shall not effect at any time directly or indirectly
the repricing of any outstanding Options, including without limitation a
repricing by the cancellation of any outstanding Options under the Plan and the
grant in substitution therefor of new Options under the Plan covering the same
or different amount of shares of stock. Notwithstanding the foregoing, an Option
(whether an Incentive Stock Option or a Non-Qualified Stock Option) may be
granted with an exercise price lower than that set forth in the preceding
sentence if such Option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Section 424(a) of the
Code.
 
ARTICLE VIII. COVENANTS OF THE COMPANY.
 
During the terms of the Awards, the Company shall keep available at all times
the number of shares of Common Stock required to satisfy such Awards.

 
 

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ARTICLE IX. USE OF PROCEEDS FROM EXERCISE OF OPTIONS.
 
Proceeds from the exercise of Options shall constitute general funds of the
Company.
 
ARTICLE X. MISCELLANEOUS.
 
1.24.        Neither an Employee, Director or Consultant nor any person to whom
an Option may be transferred shall be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to such Award
unless and until such person has satisfied all requirements for exercise, which
can include an early exercise of the Option pursuant to its terms and the
Company has issued such shares.
 
1.25.        Nothing in the Plan or any instrument executed or Award granted
pursuant thereto shall confer upon any Employee, Director, Consultant or other
holder of Awards or Common Stock issued upon exercise of Options any right to
continue in the employ of the Company or any Affiliate (or to continue acting as
a Director or Consultant) or shall affect the right of the Company or any
Affiliate to terminate the employment of any Employee with or without cause, the
right of the Company’s Board of Directors and/or the Company’s stockholders to
remove any Director pursuant to the terms of the Company’s Articles of
Incorporation and By-Laws and the provisions of Delaware Law, or the right to
terminate the relationship of any Consultant with the Company or its Affiliates.
 
1.26.        If the Company or its Affiliates is required to withhold any
amounts by reason of federal, state or local tax laws, rules or regulations, in
respect of the issuance of Awards or shares of stock pursuant to the Plan, the
Company or such Affiliates shall be entitled to deduct and withhold such amounts
from any cash payments to be made to the Recipient. In any event, such person
shall promptly make available to the Company or such Affiliate, when requested
by the Company or such Affiliate, sufficient funds to meet the requirements of
such withholding, and the Company or such Affiliate may take and authorize such
steps as it may deem advisable in order to have such funds made available to the
Company or such Affiliate from any funds or property due or to become due to
such person. The exercise will not be effective until the Company has received
such funds to cover the withholding.
 
1.27.        To the extent provided by the terms of an Option Agreement, and to
the extent the Company agrees, through a vote of its Board, regarding a non-cash
payment, the person to whom an Option is granted may satisfy any federal, state
or local tax withholding obligation relating to the exercise or acquisition of
stock under an Option by any of the following means or by a combination of such
means: (i) tendering a cash payment; (ii) authorizing the Company to withhold
shares from the shares of the stock otherwise issuable to the Recipient as a
result of the exercise or acquisition of stock underlying the Option; or (iii)
delivering to the Company unencumbered shares of the Company’s stock owned by
the person acquiring the stock. The Fair Market Value of any shares of Common
Stock withheld or tendered to satisfy any such tax withholding obligations shall
not exceed the amount determined by the applicable minimum statutory withholding
rules.
 
1.28.        The Company shall not be required to issue fractional shares
pursuant to this Plan and, accordingly, a Recipient may be awarded or required
to purchase only whole shares.

 
 

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1.29.        The Plan and all determinations made and actions taken hereunder,
to the extent not otherwise governed by the Code or laws of the United States,
shall be governed by the laws of the State of Delaware and construed
accordingly, without reference to the conflict of laws principles.
 
1.30.        The receipt, transfer and exercise of any Award is subject to
taxation under Section 83 of the Code.
 
ARTICLE XI. ADJUSTMENTS UPON CHANGES IN STOCK.
 
If any change is made in the stock subject to the Plan, or subject to any Award,
without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company), the Plan will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan, and the outstanding Awards will be
appropriately adjusted in the class(es) and number of shares and price per share
of stock subject to such outstanding Awards. Such adjustments shall be made by
the Board or the Committee, the determination of which shall be final, binding
and conclusive. (The conversion of any convertible securities of the Company
shall not be treated as a transaction not involving the receipt of consideration
by the Company.)
 
ARTICLE XII. AMENDMENT OF THE PLAN AND AWARDS.
 
1.31.       The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Article XI relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
 
(a)           Increase the number of shares reserved for Awards under the Plan;
 
(b)           Modify the requirements as to eligibility for participation in the
Plan (to the extent such modification requires stockholder approval in order for
the Plan to satisfy the requirements of Section 422 of the Code); or
 
(c)           Modify the Plan in any other way if such modification requires
stockholder approval in order for the Plan to satisfy the requirements of
Section 422 of the Code.
 
1.32.       The Board may in its sole discretion submit any other amendment to
the Plan for stockholder approval, including, but not limited to, amendments to
the Plan intended to satisfy the requirements of Section 162(m) of the Code and
the regulations promulgated thereunder regarding the exclusion of
performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.

 
 

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1.33.        It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible
Employees, Directors or Consultants with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.
 
1.34.        Rights and obligations of the Recipient under any Award granted
before amendment of the Plan shall not be materially impaired by any amendment
of the Plan except with the written consent of the Recipient, unless such
amendment is necessary to comply with any applicable law, regulation or rule as
determined in the sole discretion of the Board.
 
1.35.        The Board at any time, and from time to time, may amend, modify,
extend, cancel or renew any Award or waive any restrictions or conditions
applicable to any Award or any shares acquired upon the exercise thereof and
accelerate, continue, extend or defer the exercise time for any Award or the
vesting of any shares acquired upon the exercise thereof, including with respect
to the period following a Recipient’s termination of Continuous Status as an
Employee, Director or Consultant; provided, however, that the rights and
obligations under any Award shall not be materially impaired by any such
amendment except with the written consent of the Recipient, unless such
amendment is necessary to comply with any applicable law, regulation or rule as
determined in the sole discretion of the Board.
 
The Board may accelerate the time at which an Option may first be exercised or
the time during which an Option or any part thereof will vest notwithstanding
the provisions in the Option Agreement stating the time at which it may first be
exercised or the time during which it will vest.
 
1.36.        The Board may amend the Plan to take into account changes in law
and tax and accounting rules, as well as other developments, and to grant Awards
that qualify for beneficial treatment under such rules without stockholder
approval.
 
ARTICLE XIII. TERMINATION OR SUSPENSION OF THE PLAN.
 
1.37.        The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on June 7, 2020, which shall be
within ten (10) years from the date the Plan is adopted by the Board or approved
by the stockholders of the Company, whichever is later. No Awards may be granted
under the Plan while the Plan is suspended or after it is terminated.
 
1.38.        Rights and obligations under any Award granted while the Plan is in
effect shall not be impaired by suspension or termination of the Plan, except
with the written consent of the Recipient, unless such impairment is necessary
to qualify the Award as an Incentive Stock Option or to comply with any
applicable law, regulation or rule all as determined in the sole discretion of
the Board.
 
ARTICLE XIV. EFFECTIVE DATE OF PLAN.
 
The Plan shall become effective as determined by the Board, but no Awards
granted under the Plan shall be exercised unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be obtained
within twelve (12) months before or after the date when the Plan is adopted by
the Board.

 
 

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ARTICLE XV. COMPLIANCE WITH SECURITIES LAWS.
 
The grant of Awards and the issuance of shares of Common Stock upon the exercise
of Options shall be subject to compliance with all applicable requirements of
federal and state law with respect to such securities. Options may not be
exercised if the issuance of shares of Common Stock upon exercise would
constitute a violation of any applicable federal or state securities laws or
other laws or regulations or the requirements of any stock exchange or market
system upon which the Common Stock may then be listed. In addition, no Option
may be exercised unless (A) a registration statement under the Act shall at the
time of exercise of the Option be in effect with respect to the Common Stock
shares to be issued upon the exercise of that Option or (B) in the opinion of
counsel to the Company, the Common Stock shares issuable upon exercise of the
Option may be issued in accordance with the terms of an applicable exemption
from the registration requirements of the Act. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Common Stock shares under the Plan shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition of the
exercise of any Option, the Company may require the Recipient to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company. The Company may, upon the
advice of counsel to the Company, place legends on stock certificates issued
under the Plan as such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to, legends
restricting the transfer of the Common Stock.
 
ARTICLE XVI. COMPLIANCE WITH SECTION 409A.
 
To the extent that the Board determines that any Award granted under the Plan is
subject to Section 409A of the Code, the Option Agreement or other agreement
evidencing the Award will incorporate the terms and conditions required by
Section 409A of the Code. To the extent applicable, the Plan and Award
agreements will be interpreted in accordance with Section 409A of the Code and
Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance
that may be issued after the Plan's effective date. Notwithstanding any
provision of the Plan to the contrary, in the event that following the Plan's
effective date the Board determines that any Award may be subject to Section
409A of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the Plan's effective
date), the Board may adopt such amendment to the Plan and applicable Award
agreements or adopt other policies and procedures (including amendments,
policies and procedures with retroactive effect), or take any other actions,
that the Board determines are necessary or appropriate to (a) exempt the Award
from Section 409A of the Code and/or preserve the intended tax treatment of the
benefits provided with respect to the Award, or (b) comply with the requirements
of Section 409A of the Code and related Department of Treasury guidance.

 
 

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