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EXHIBIT 10.2

 
 
LENCO MOBILE, INC.
2011 NONSTATUTORY STOCK OPTION PLAN
 

 
EFFECTIVE AS OF DECEMBER 27, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 
 

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LENCO MOBILE, INC.
2011 NONSTATUTORY STOCK OPTION PLAN

 
EFFECTIVE AS OF DECEMBER 27, 2011
 
SECTION 1.                                INTRODUCTION.
 
The Board adopted this Plan effective as of December 27, 2011 (the “Adoption
Date”) subject to Section 12 below.
 
The purpose of the Plan is to promote the long-term success of the Company and
the creation of stockholder value by offering Key Employees an opportunity to
acquire a proprietary interest in the success of the Company, or to increase
such interest, and to encourage such Key Employees to continue to provide
services to the Company and to attract new individuals with outstanding
qualifications.  In addition, this Plan is intended to fulfill certain Company
compensatory obligations owed to Key Employees arising from the iLoop
Acquisition.
 
The Plan seeks to achieve these purposes by providing for Awards in the form of
Nonstatutory Stock Options.
 
The Plan shall be governed by, and construed in accordance with, the laws of the
State of Delaware (except its choice-of-law provisions).  Capitalized terms
shall have the meaning provided in Section 2 unless otherwise provided in this
Plan or any applicable Stock Option Agreement.
 
SECTION 2.                                DEFINITIONS.
 
(a)           “Affiliate” means any entity other than a Subsidiary, if the
Company and/or one or more Subsidiaries own not less than 50% of such entity.
 
(b)           “Award” means any award of an Option under the Plan.
 
(c)           “Board” means the Board of Directors of the Company, as
constituted from time to time.
 
(d)           “California Participant” means a Participant whose Award, when
granted, was issued in reliance either on section 25111, 25112 or 25113 of the
California Corporations Code.  Solely to the extent required to comply with the
requirements of the California Corporate Securities Law of 1968 at the time of
Grant and thereafter, Awards to California Participants shall also be subject to
the additional terms specified in Appendix A.  The Committee, in its discretion,
may also elect to include some or all of the Appendix A terms in Awards to
Participants who are not California Participants.  Appendix A is a part of this
Plan.
 

 
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(e)          “Cashless Exercise” means, to the extent that a Stock Option
Agreement so provides and as permitted by applicable law, a program approved by
the Committee in which payment may be made all or in part by delivery (on a form
prescribed by the Committee) of an irrevocable direction to a securities broker
to sell Shares and to deliver all or part of the sale proceeds to the Company in
payment of the aggregate Exercise Price and any applicable tax withholding
obligations (up to the maximum amount permitted by applicable law or to avoid
liability accounting) relating to the Option.
 
(f)           “Cause” means, except as may otherwise be provided in a
Participant employment agreement or applicable Award agreement, (i) a conviction
of a Participant for a felony crime or the failure of a Participant to contest
prosecution for a felony crime, or (ii) a Participant’s misconduct, fraud,
disloyalty or dishonesty (as such terms may be defined by the Committee in its
sole discretion), or (iii) any unauthorized use or disclosure of confidential
information or trade secrets by a Participant, or (iv) a Participant's
negligence, malfeasance, breach of fiduciary duties, neglect of duties, or (v)
any material violation by a Participant of a written Company or Subsidiary or
Affiliate policy or any material breach by a Participant of a written agreement
with the Company or Subsidiary or Affiliate, or (vi) any other act or omission
by a Participant that, in the opinion of the Committee, could reasonably be
expected to adversely affect the Company's or a Subsidiary’s or an Affiliate's
business, financial condition, prospects and/or reputation.  In each of the
foregoing subclauses (i) through (vi), whether or not a "Cause" event has
occurred will be determined by the Committee in its sole discretion and the
Committee’s determination shall be conclusive, final and binding.
 
(g)           “Change in Control” except as may otherwise be provided in a
Participant’s employment agreement or Award agreement, means the occurrence of
any of the following:
 
(i)            The consummation of an acquisition, a merger or consolidation of
the Company with or into another entity or any other corporate reorganization,
if more than 50% of the combined voting power of the continuing or surviving
entity's securities outstanding immediately after such acquisition, merger,
consolidation or other reorganization is owned by persons who in the aggregate
owned less than 20% of the Company’s combined voting power represented by the
Company’s outstanding securities immediately prior to such acquisition, merger,
consolidation or other reorganization;
 
(ii)           The sale, transfer or other disposition of all or substantially
all of the Company's assets; or
 
(iii)           When a majority of the members of the Board shall not be Company
Incumbent Directors.
 
A transaction shall not constitute a Change in Control if its sole purpose is to
change the state of the Company's incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
the Company's securities immediately before such transactions.  For avoidance of
doubt, the consummation of the iLoop Acquisition is not a Change in Control for
purposes of this Plan.
 
 
 
 

 
 
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(h)            “Code” means the Internal Revenue Code of 1986, as amended.
 
(i)             “Committee” means a committee consisting of one or more members
of the Board that is appointed by the Board (as described in Section 3) to
administer the Plan.  If no Committee has been appointed, the full Board shall
constitute the Committee.
 
(j)             “Common Stock” means the Company’s common stock, par value
$0.001 per share, and any other securities into which such shares are changed,
for which such shares are exchanged or which may be issued in respect thereof.
 
(k)            “Company” means Lenco Mobile Inc., a Delaware corporation.
 
(l)             “Company Incumbent Directors” means (A) individuals who as of
the Adoption Date are members of the Board, (B) individuals elected or directors
of the Company subsequent to the Adoption Date for whose election proxies shall
have been solicited by the Board, or (C) any individual elected or appointed to
the Board to fill vacancies of the Board caused by death or resignation (but not
by removal) or to fill newly created directorships.
 
(m)           “Consultant” means an individual who performs bona fide services
to the Company, a Parent, a Subsidiary or an Affiliate other than as an Employee
or Director or Non-Employee Director.
 
(n)            “Director” means a member of the Board who is also an Employee.
 
(o)            “Disability” means that the Key Employee is classified as
disabled under a long-term disability policy of the Company or, if no such
policy applies, the Key Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months.  The
Disability of a Key Employee shall be determined solely by the Committee on the
basis of such medical evidence as the Committee deems warranted under the
circumstances.
 
(p)            “Employee” means any individual who is a common-law employee of
the Company, a Parent, a Subsidiary or an Affiliate.
 
(q)            “Exchange Act” means the Securities Exchange Act of 1934, as
amended.
 
(r)            “Exercise Price” means the amount for which a Share may be
purchased upon exercise of such Option, as specified in the applicable Stock
Option Agreement.
 
(s)            “Fair Market Value” means the market price of a Share, determined
by the Committee as follows:
 

 
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(i)           If the Shares were traded on a stock exchange (such as the New
York Stock Exchange, NYSE Amex, the NASDAQ Global Market or NASDAQ Capital
Market) at the time of determination, then the Fair Market Value shall be equal
to the regular session closing price for such stock as reported by such exchange
(or the exchange or market with the greatest volume of trading in the Shares) on
the last trading date preceding the date of determination;
 
(ii)           If the Shares were traded on the OTC Bulletin Board at the time
of determination, then the Fair Market Value shall be equal to the closing price
reported by the OTC Bulletin Board for the last trading date preceding such date
of determination; and
 
(iii)           If neither of the foregoing provisions is applicable, then the
Fair Market Value shall be determined by the Committee in good faith using a
reasonable application of a reasonable valuation method as the Committee deems
appropriate.
 
Whenever possible, the determination of Fair Market Value by the Committee shall
be based on the prices reported by the applicable exchange or the OTC Bulletin
Board, as applicable, or a nationally recognized publisher of stock prices or
quotations (including an electronic on-line publication).  Such determination
shall be conclusive and binding on all persons.
 
(t)            “Grant” means any grant of an Option under the Plan.
 
(u)           “iLoop Acquisition” means the Company's acquisition of iLoop in
accordance with The Amended and Restated Agreement and Plan of Merger, dated as
of December [21], 2011, by and among the Company, QLP Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of the Company, iLoop, and
Shareholder Representative Services LLC, a Colorado limited liability company,
solely in its capacity as the Stockholders’ Representative.
 
(v)           “iLoop” means iLoop Mobile, Inc., a Delaware corporation.
 
(w)          “Incentive Stock Option” or “ISO” means an incentive stock option
described in Code section 422.
 
(x)           “Key Employee” means any individual who (i) is either an employee,
director and/or consultant of iLoop as of the consummation of the iLoop
Acquisition, (ii) is an Employee, Director, Non-Employee Director and/or
Consultant as of the date of Grant of his/her Award, and (iii) is affirmatively
selected by the Committee to be a grantee of an Award.
 
(y)           “Non-Employee Director” means a member of the Board who is not an
Employee.
 
(z)           “Nonstatutory Stock Option” or “NSO” means a stock option that is
not an ISO.
 

 
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(aa)         “Officer” means an individual who is an officer of the Company
within the meaning of Rule 16a-1(f) of the Exchange Act.
 
(bb)        “Option” means a NSO granted under the Plan entitling the Optionee
to purchase a specified number of Shares, at such times and applying a specified
Exercise Price, as provided in the applicable Stock Option Agreement.
 
(cc)         “Optionee” means an individual, estate or other entity that holds
an Option.
 
(dd)         “Parent” means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company, if each of the
corporations other than the Company owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.  A corporation that attains the status of a
Parent on a date after the adoption of the Plan shall be considered a Parent
commencing as of such date.
 
(ee)         “Participant” means an individual or estate or other entity that
holds an Award.
 
(ff)          “Plan” means this Lenco Mobile, Inc. 2011 Nonstatutory Stock
Option Plan as it may be amended from time to time.
 
(gg)        “Re-Price” means that the Company has lowered or reduced the
Exercise Price of outstanding Options for any Participant(s) in a manner
described by SEC Regulation S-K Item 402(d)(2)(viii) (or as described in any
successor provision(s) or definition(s)).
 
(hh)        “SEC” means the Securities and Exchange Commission.
 
(ii)           “Section 16 Persons” means those Officers or Directors or
Non-Employee Directors or other persons who are subject to Section 16 of the
Exchange Act.
 
(jj)           “Section 280G Approval” means the separate approval by
stockholders owning more than 75% of the voting power of all outstanding stock
of the Company entitled to vote immediately before a Change in Control which
approval shall be obtained in compliance with the requirements of Code Section
280G(b)(5)(B), as amended, including any successor thereof, and the regulations
promulgated thereunder, as determined by the Committee in its sole discretion.
 
(kk)         “Securities Act” means the Securities Act of 1933, as amended.
 
(ll)           “Service” means service as an Employee, Director, Non-Employee
Director or Consultant.  Service will be deemed terminated as soon as the entity
to which Service is being provided is no longer either (i) the Company, (ii) a
Parent, (iii) a Subsidiary or (iv) an Affiliate.  The Committee determines when
Service commences and when Service terminates.  A Participant’s Service does not
terminate if he or she is a common-law employee and goes on a bona fide leave of
absence that was approved by the Company in writing and the terms of the leave
provide for continued service crediting, or when continued service crediting is
required by applicable law.  Service terminates in any event when the approved
leave ends, unless such Employee immediately returns to active work.  The
Committee determines which leaves count toward Service and when Service
terminates for all purposes under the Plan.
 

 
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(mm)        “Share” means one share of Common Stock.
 
(nn)          “Stock Option Agreement” means the agreement described in
Section 6 evidencing each Grant of an Option.
 
(oo)          “Stockholders Agreement” means any applicable agreement between
the Company’s stockholders and/or investors that provides certain rights and
obligations for all stockholders.
 
(pp)          “Subsidiary” means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company, if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.  A corporation
that attains the status of a Subsidiary on a date after the adoption of the Plan
shall be considered a Subsidiary commencing as of such date.
 
(qq)          “Termination Date” means the date on which a Participant’s Service
terminates as determined by the Committee.
 
(rr)           “10-Percent Shareholder” means an individual who owns more than
ten percent (10%) of the total combined voting power of all classes of
outstanding stock of the Company, its Parent or any of its Subsidiaries.  In
determining stock ownership, the attribution rules of section 424(d) of the Code
shall be applied.
 
 
SECTION 3.                                ADMINISTRATION.
 
(a)            Committee Composition.  A Committee appointed by the Board shall
administer the Plan.  Unless the Board provides otherwise, the Board’s
Compensation Committee (or a comparable committee of the Board) shall be the
Committee.  The Board may also at any time terminate the functions of the
Committee and reassume all powers and authority previously delegated to the
Committee.
 
To the extent required, the Committee shall have membership composition which
enables Awards to Section 16 Persons to qualify as exempt from liability under
Section 16(b) of the Exchange Act.
 
The Board may also appoint one or more separate committees of the Board, each
composed of one or more directors of the Company who need not qualify under
Rule 16b-3 of the Exchange Act that may administer the Plan with respect to Key
Employees who are not Section 16 Persons, may grant Awards under the Plan to
such Key Employees and may determine all terms of such Awards.  To the extent
permitted by applicable law, the Board may also appoint a committee, composed of
one or more officers of the Company, that may authorize Awards to Employees (who
are not Section 16 Persons) within parameters specified by the Board and
consistent with any limitations imposed by applicable law.
 

 
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(b)           Authority of the Committee.  Subject to the provisions of the
Plan, the Committee shall have full authority and discretion to take any actions
it deems necessary or advisable for the administration of the Plan.  Such
actions shall include without limitation:
 
(i)             selecting Key Employees who are to receive Awards under the
Plan;
 
(ii)            determining the type, number, vesting requirements, performance
conditions (if any) and their degree of satisfaction, and other features and
conditions of such Awards and amending such Awards;
 
(iii)           correcting any defect, supplying any omission, or reconciling or
clarifying any inconsistency in the Plan or any Award agreement;
 
(iv)           accelerating the vesting, or extending the post-termination
exercise term, or waiving restrictions, of Awards at any time and under such
terms and conditions as it deems appropriate;
 
(v)            interpreting the Plan and any Award agreements;
 
(vi)           making all other decisions relating to the operation of the Plan;
and
 
(vii)          adopting such plans or subplans as may be deemed necessary or
appropriate to provide for the participation by non-U.S. employees of the
Company and its Subsidiaries and Affiliates, which plans and/or subplans shall
be attached hereto as Appendices.
 
The Committee may adopt such rules or guidelines, as it deems appropriate to
implement the Plan.  The Committee’s determinations under the Plan shall be
final and binding on all persons.  The Committee’s decisions and determinations
need not be uniform and may be made selectively among Participants in the
Committee’s sole discretion.  The Committee’s decisions and determinations will
be afforded the maximum deference provided by law.
 
(c)           Indemnification.  To the maximum extent permitted by applicable
law, each member of the Committee, or of the Board, or any persons (including
without limitation Employees and Officers) who are delegated by the Board or
Committee to perform administrative functions in connection with the Plan, shall
be indemnified and held harmless by the Company against and from (i) any loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
him or her in connection with or resulting from any claim, action, suit, or
proceeding to which he or she may be a party or in which he or she may be
involved by reason of any action taken or failure to act under the Plan or any
Award agreement, and (ii) from any and all amounts paid by him or her in
settlement thereof, with the Company’s approval, or paid by him or her in
satisfaction of any judgment in any such claim, action, suit, or proceeding
against him or her, provided he or she shall give the Company an opportunity, at
its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf.  The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under
any power that the Company may have to indemnify them or hold them harmless.
 

 
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SECTION 4.                                GENERAL.
 
(a)           Eligibility.  Only Key Employees may receive Awards under this
Plan.
 
(b)           No Incentive Stock Options.  No ISOs may be granted under this
Plan.
 
(c)           Restrictions on Shares.  Any Shares issued pursuant to an Award
shall be subject to such rights of repurchase, rights of first refusal and other
transfer restrictions as the Committee may determine.  Such restrictions shall
apply in addition to any restrictions that may apply to holders of Shares
generally and shall also comply to the extent necessary with applicable law.  In
no event shall the Company be required to issue fractional Shares under this
Plan.
 
(d)           Beneficiaries.  A Participant may designate one or more
beneficiaries with respect to an Award by timely filing the prescribed form with
the Company.  A beneficiary designation may be changed by filing the prescribed
form with the Company at any time before the Participant’s death.  If no
beneficiary was designated or if no designated beneficiary survives the
Participant, then after a Participant’s death any vested Award(s) shall be
transferred or distributed to the Participant’s estate.
 
(e)           Performance Conditions.  The Committee may, in its discretion and
subject to Appendix A, include performance conditions in any Award.
 
(f)           Stockholder Rights.  A Participant, or a transferee of a
Participant, shall have no rights as a stockholder (including without limitation
voting rights or dividend or distribution rights) with respect to any Common
Stock covered by an Award until such person becomes entitled to receive such
Common Stock, has satisfied any applicable withholding or tax obligations
relating to the Award and has been issued the applicable stock certificate by
the Company.  No adjustment shall be made for cash or stock dividends or other
rights for which the record date is prior to the date when such certificate is
issued, except as expressly provided in Section 8.  The issuance of an Award may
be subject to and conditioned upon the Participant’s agreement to become a party
to a Stockholders Agreement and be bound by its terms.
 
(g)           Buyout of Awards.  The Committee may at any time offer to buy out,
for a payment in cash or cash equivalents (including without limitation Shares
issued at Fair Market Value that may or may not be issued under this Plan), an
Award previously granted based upon such terms and conditions as the Committee
shall establish.
 
 
 
 
 

 
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(h)           Termination of Service.  Unless the applicable Award agreement or
employment agreement provides otherwise (and in such case, the Award or
employment agreement shall govern as to the consequences of a termination of
Service for such Awards subject to Appendix A, the following rules shall govern
the vesting, exercisability and term of outstanding Options held by a
Participant in the event of termination of such Participant's Service (in all
cases subject to the term of the Option):  (i) if the Service of a Participant
is terminated for Cause, then all Options shall terminate and be forfeited
immediately without consideration; (ii) if the Service of Participant is
terminated for any reason other than for Cause, death or Disability, then the
vested portion of his/her then-outstanding Options may be exercised by such
Participant or his or her personal representative within three months after the
date of such termination and all unvested portions of any outstanding Options
shall be forfeited without consideration as of the date of such termination; or
(iii) if the Service of a Participant is terminated due to death or Disability,
the vested portion of his/her then-outstanding Options may be exercised within
twelve months after the date of termination of Service and all unvested portions
of any outstanding Options shall be forfeited without consideration as of the
date of such termination.
 
(i)            Suspension or Termination of Awards.  If at any time (including
after a notice of exercise has been delivered) the Committee (or the Board),
reasonably believes that a Participant has committed an act of Cause (which
includes a failure to act), the Committee (or Board) may suspend the
Participant's right to exercise any Option pending a determination of whether
there was in fact an act of Cause.  If the Committee (or the Board) determines a
Participant has committed an act of Cause, neither the Participant nor his or
her estate shall be entitled to exercise any outstanding Option whatsoever and
all of Participant's outstanding Awards shall then terminate without
consideration.  Any determination by the Committee (or the Board) with respect
to the foregoing shall be final, conclusive and binding on all interested
parties.
 
(j)            Code Section 409A.  Notwithstanding anything in the Plan to the
contrary, the Plan and Awards granted hereunder are intended to comply with the
requirements of Code Section 409A and shall be interpreted in a manner
consistent with such intention.  If upon a Participant’s “separation from
service” within the meaning of Code Section 409A, he/she is then a “specified
employee” (as defined in Code Section 409A), then solely to the extent necessary
to comply with Code Section 409A and avoid the imposition of taxes under Code
Section 409A, the Company shall defer payment of “nonqualified deferred
compensation” subject to Code Section 409A payable as a result of and within six
(6) months following such separation from service under this Plan until the
earlier of (i) the first business day of the seventh month following the
Participant’s separation from service, or (ii) ten (10) days after the Company
receives written notification of the Participant’s death.  Any such delayed
payments shall be made without interest.
 
(k)           Electronic Communications.  Subject to compliance with applicable
law and/or regulations, an Award agreement or other documentation or notices
relating to the Plan and/or Awards may be communicated to Participants by
electronic media.
 
 
 
 
 
 
 

 
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(l)             Unfunded Plan.  Insofar as it provides for Awards, the Plan
shall be unfunded.  Although bookkeeping accounts may be established with
respect to Participants who are granted Awards under this Plan, any such
accounts will be used merely as a bookkeeping convenience.  The Company shall
not be required to segregate any assets which may at any time be represented by
Awards, nor shall this Plan be construed as providing for such segregation, nor
shall the Company or the Committee be deemed to be a trustee of stock or cash to
be awarded under the Plan.
 
(m)           Liability of Company.  The Company (or members of the Board or
Committee) shall not be liable to a Participant or other persons as to: (i) the
non-issuance or sale of Shares as to which the Company has been unable to obtain
from any regulatory body having jurisdiction the authority deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any Shares
hereunder; and (ii) any unexpected or adverse tax consequence or any tax
consequence expected but not realized by any Participant or other person due to
the grant, receipt, exercise or settlement of any Award granted hereunder.
 
(n)            Reformation.  In the event any provision of this Plan shall be
held illegal or invalid for any reason, such provisions will be reformed by the
Board if possible and to the extent needed in order to be held legal and valid.
If it is not possible to reform the illegal or invalid provisions then the
illegality or invalidity shall not affect the remaining parts of this Plan, and
this Plan shall be construed and enforced as if the illegal or invalid provision
had not been included.
 
SECTION 5.                                SHARES SUBJECT TO PLAN.
 
(a)            Basic Limitation.  The Common Stock issuable under the Plan shall
be authorized but unissued Shares or treasury Shares.  The aggregate number of
Shares reserved for Awards under the Plan shall equal 10,984,000 Shares, subject
to adjustment pursuant to Section 8.
 
(b)            No Share Recycling.  Once an Award has been granted, then as of
its Grant date, the number of Shares underlying such Award shall fully count
toward the Share Limit irrespective of whether or not such Award is ultimately
fully exercised or terminated or whether some Shares subject to the Award are
not actually issued to the Participant.
 
(c)            Dividend Equivalents.  No dividend equivalents shall be permitted
with respect to any outstanding Options.
 
SECTION 6.                                TERMS AND CONDITIONS OF OPTIONS.
 
(a)            Stock Option Agreement.  Each Grant of an Option under the Plan
shall be evidenced by a Stock Option Agreement between the Optionee and the
Company.  Such Option shall be subject to all applicable terms and conditions of
the Plan and may be subject to any other terms and conditions that are not
inconsistent with the Plan and that the Committee deems appropriate for
inclusion in a Stock Option Agreement.  The provisions of the various Stock
Option Agreements entered into under the Plan need not be identical.
 

 
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(b)            Number of Shares.  Each Stock Option Agreement shall specify the
number of Shares that are subject to the Option and shall provide for the
adjustment of such number in accordance with Section 8.
 
(c)            Exercise Price.  An Option’s Exercise Price shall be established
by the Committee and set forth in a Stock Option Agreement.  The Exercise Price
of an Option shall not be less than 100% of the Fair Market Value of a Share on
the date of Grant.
 
(d)            Exercisability and Term.  Each Stock Option Agreement shall
specify the date when all or any installment of the Option is to become vested
and/or exercisable.  The Stock Option Agreement shall also specify the term of
the Option; provided, however that the term of an Option shall in no event
exceed ten (10) years from the date of Grant.  No Option can be exercised after
the expiration date provided in the applicable Stock Option Agreement.  A Stock
Option Agreement may provide for accelerated exercisability in the event of the
Optionee’s death, Disability or retirement or other events and may provide for
expiration prior to the end of its term in the event of the termination of the
Optionee’s Service.  In no event shall the Company be required to issue
fractional Shares upon the exercise of an Option and the Committee may specify a
minimum number of Shares that must be purchased in any one Option exercise.
 
(e)            Modifications or Assumption of Options.  Within the limitations
of the Plan, the Committee may modify, extend or may accept the cancellation of
outstanding stock options granted by the Company in return for the grant of new
Options for the same or a different number of Shares and at the same or a
different Exercise Price.  The Committee may in its discretion Re-Price
outstanding Options.  No modification of an Option shall, without the consent of
the Optionee, impair his or her rights under such Option.
 
(f)            Transferability of Options.  Except as otherwise provided in the
applicable Stock Option Agreement and then only to the extent permitted by
applicable law, no Option shall be transferable by the Optionee other than by
will or by the laws of descent and distribution.  Except as otherwise provided
in the applicable Stock Option Agreement, an Option may be exercised during the
lifetime of the Optionee only by Optionee or by the guardian or legal
representative of the Optionee.  No Option or interest therein may be assigned,
pledged or hypothecated by the Optionee during his/her lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.
 
SECTION 7.                                PAYMENT FOR OPTION SHARES.
 
(a)           General Rule.  The entire Exercise Price of Shares issued upon
exercise of Options shall be payable in cash at the time when such Shares are
purchased by the Optionee, except as follows and if so provided for in an
applicable Stock Option Agreement.  The Committee may, in its discretion, at any
time accept payment in any form(s) described in this Section 7.
 
 
 
 

 
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(b)            Surrender of Stock.  To the extent that this Section 7(b) is made
applicable to an Option in a Stock Option Agreement, payment for all or any part
of the Exercise Price may be made with Shares which have already been owned by
the Optionee for such duration as shall be specified by the Committee.  Such
Shares shall be valued at their Fair Market Value on the date when the new
Shares are purchased under the Plan.
 
(c)            Cashless Exercise.  To the extent that this Section 7(c) is made
applicable to an Option in a Stock Option Agreement, payment for all or a part
of the Exercise Price may be made through Cashless Exercise.
 
(d)            Net Exercise.  To the extent that this Section 7(d) is made
applicable to an Option in a Stock Option Agreement, payment for all or a part
of the Exercise Price may be made through a “net exercise” arrangement pursuant
to which the number of Shares issued to the Optionee in connection with the
Optionee’s exercise of the Option will be reduced by the Company’s retention of
a portion of such Shares.  Upon such a net exercise of an Option, the Optionee
will receive a net number of Shares that is equal to (i) the number of Shares as
to which the Option is being exercised minus (ii) the quotient (rounded down to
the nearest whole number) of the aggregate Exercise Price of the Shares being
exercised divided by the Fair Market Value of a Share on the Option exercise
date.  The number of Shares covered by clause (ii) will be retained by the
Company and not delivered to the Optionee.  No fractional Shares will be created
as a result of a net exercise and the Optionee must contemporaneously pay for
any portion of the aggregate Exercise Price that is not covered by the Shares
retained by the Company under clause (ii).
 
(e)            Other Forms of Payment.  To the extent that this Section 7(e) is
made applicable to an Option in a Stock Option Agreement, payment may be made in
any other form that is consistent with applicable laws, regulations and rules
and approved by the Committee.
 
SECTION 8.                         ADJUSTMENTS.
 
(a)            Adjustments.  In the event of a subdivision of the outstanding
Shares, a declaration of a dividend payable in Shares, a declaration of a
dividend payable in a form other than Shares in an amount that has a material
effect on the price of Shares, a combination or consolidation of the outstanding
Shares (by reclassification or otherwise) into a lesser number of Shares, a
stock split, a reverse stock split, a reclassification or other distribution of
the Shares without the receipt of consideration by the Company, of or on the
Common Stock, a recapitalization, a combination, a spin-off or a similar
occurrence, the Committee shall make equitable and proportionate adjustments to:
 
(i)           The Share Limit specified in Section 5(a);
 
(ii)           the number and kind of securities available for Awards under
Section 5;
 
(iii)           the number and kind of securities covered by each outstanding
Award;
 
(iv)           the Exercise Price under each outstanding Option; and
 
(v)           the number and kind of outstanding securities issued under the
Plan.
 

 
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(b)            Participant Rights.  Except as provided in this Section 8, a
Participant shall have no rights by reason of any issue by the Company of stock
of any class or securities convertible into stock of any class, any subdivision
or consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class.  If by reason of an adjustment pursuant to this Section 8, a
Participant’s Award covers additional or different shares of stock or
securities, then such additional or different shares and the Award in respect
thereof shall be subject to all of the terms, conditions and restrictions which
were applicable to the Award and the Shares subject to the Award prior to such
adjustment.
 
(c)            Fractional Shares.  Any adjustment of Shares pursuant to this
Section 8 shall be rounded down to the nearest whole number of Shares.  Under no
circumstances shall the Company be required to authorize or issue fractional
shares and no consideration shall be provided as a result of any fractional
shares not being issued or authorized.
 
SECTION 9.                         EFFECT OF A CHANGE IN CONTROL.
 
(a)            Merger or Reorganization.  In the event that the Company is a
party to a merger or other reorganization, outstanding Awards shall be subject
to the agreement of merger or reorganization.  Such agreement may provide,
without limitation, for the assumption of outstanding Awards by the surviving
corporation or its parent, for their continuation by the Company (if the Company
is a surviving corporation), for accelerated vesting or for their cancellation
with or without consideration, in all cases without the consent of the
Participant.
 
(b)            Acceleration of Vesting.  Except as otherwise provided in the
applicable Stock Option Agreement, in the event that a Change in Control occurs
with respect to the Company and the applicable agreement of merger or
reorganization provides for assumption or continuation of Awards pursuant to
Section 9(a), no acceleration of vesting shall occur.  In the event that a
Change in Control occurs with respect to the Company and there is no assumption
or continuation of Awards pursuant to Section 9(a), the Committee in its
discretion may provide that all Awards shall vest and become exercisable as of
immediately before such Change in Control.  The Committee may also in its
discretion include in an Award agreement a requirement that unless Section 280G
Approval has been obtained, no acceleration of vesting shall occur with respect
to an Award to the extent that such acceleration would, after taking into
account any other payments in the nature of compensation to which the
Participant would have a right to receive from the Company and any other person
contingent upon the occurrence of such Change in Control, result in a “parachute
payment” as defined under Code Section 280G.
 
SECTION 10.                         LIMITATIONS ON RIGHTS.
 
(a)            Retention Rights.  Neither the Plan nor any Award granted under
the Plan shall be deemed to give any individual a right to remain an Employee,
Consultant, Director or Non-Employee Director of the Company, a Parent, a
Subsidiary or an Affiliate or to receive any future Awards under the Plan.  The
Company and its Parents and Subsidiaries and Affiliates reserve the right to
terminate the Service of any person at any time, and for any reason, subject to
applicable laws, the Company’s Certificate of Incorporation and Bylaws and a
written employment agreement (if any).
 
 
 

 
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(b)            Regulatory Requirements.  Any other provision of the Plan
notwithstanding, the obligation of the Company to issue Shares or other
securities under the Plan shall be subject to all applicable laws, rules and
regulations and such approval by any regulatory body as may be required.  The
Company reserves the right to restrict, in whole or in part, the delivery of
Shares or other securities pursuant to any Award prior to the satisfaction of
all legal requirements relating to the issuance of such Shares or other
securities, to their registration, qualification or listing or to an exemption
from registration, qualification or listing.
 
(c)            Dissolution.  To the extent not previously exercised or settled,
all Options shall terminate immediately prior to the dissolution or liquidation
of the Company and be forfeited to the Company.
 
(d)            Clawback Policy.  The Company may (i) cause the cancellation of
any Award, (ii) require reimbursement of any Award by a Participant and (iii)
effect any other right of recoupment of equity or other compensation provided
under this Plan or otherwise in accordance with Company policies and/or
applicable law (each, a “Clawback Policy”).  In addition, a Participant may be
required to repay to the Company certain previously paid compensation, whether
provided under this Plan or an Award Agreement or otherwise, in accordance with
the Clawback Policy.
 
SECTION 11.                         WITHHOLDING TAXES.
 
(a)            General.  A Participant shall make arrangements satisfactory to
the Company for the satisfaction of any withholding tax obligations that arise
in connection with his or her Award.  The Company shall not be required to issue
any Shares or make any payment under the Plan until such obligations are
satisfied.
 
(b)            Share Withholding.  The Committee in its discretion may permit a
Participant to satisfy all or part of his or her withholding or income tax
obligations by having the Company withhold all or a portion of any Shares that
otherwise would be issued to him or her or by surrendering all or a portion of
any Shares that he or she previously acquired (or by stock attestation).  Such
Shares shall be valued based on the value of the actual trade or, if there is
none, the Fair Market Value as of the previous day.  Any payment of taxes by
assigning Shares to the Company may be subject to restrictions, including, but
not limited to, any restrictions required by rules of the SEC.  The Committee
may also, in its discretion, permit a Participant to satisfy withholding or
income tax obligations (up to the maximum amount permitted by applicable law or
to avoid liability accounting) related to an Award through a sale of Shares
underlying the Award or, in the case of Options, through a net exercise or
Cashless Exercise.
 
SECTION 12.                         DURATION AND AMENDMENTS.
 
(a)            Term of the Plan.  The Plan, as set forth herein, is effective on
the Adoption Date.  The Plan shall terminate on the earliest of (i) the day
before the tenth anniversary of the Adoption Date, (ii) January 31, 2012 if the
consummation of the iLoop Acquisition has not yet occurred, or (iii) any earlier
date pursuant to this Section 12.  No Awards may be granted under this Plan
prior to the consummation of the iLoop Acquisition. This Plan will not in any
way affect outstanding awards that were issued under any other Company prior
equity compensation plans.
 

 
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(b)           Right to Amend or Terminate the Plan.  The Board may amend or
terminate the Plan at any time and for any reason.  No Awards shall be granted
under the Plan after the Plan’s termination.  An amendment of the Plan shall be
subject to the approval of the Company’s stockholders only to the extent
required by applicable laws, regulations or rules.  In addition, no such
amendment or termination shall be made which would impair the rights of any
Participant, without such Participant’s written consent, under any
then-outstanding Award, provided that no such Participant consent shall be
required with respect to any amendment or alteration if the Committee determines
in its sole discretion that such amendment or alteration either (i) is required
or advisable in order for the Company, the Plan or the Award to satisfy or
conform to any law or regulation or to meet the requirements of any accounting
standard, or (ii) is not reasonably likely to significantly diminish the
benefits provided under such Award, or that any such diminishment has been
adequately compensated.  In the event of any conflict in terms between the Plan
and any Award agreement, the terms of the Plan shall prevail and govern.
 
 
SECTION 13.                         EXECUTION.
 
To record the adoption of the Plan by the Board, the Company has caused its duly
authorized officer to execute this Plan on behalf of the Company.
 
 

 
LENCO MOBILE, INC.
 
         
 
By:
/s/ Michael Levinsohn       Name: Michael Levinsohn         Title: Chief
Executive Officer             

 
 
 
 
 
 
 

 
 
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APPENDIX A

Additional Terms of Awards to California Participants
 
To the extent necessary to comply with the California Corporate Securities Law
of 1968 as amended, the following additional terms listed under items 1 through
6 below shall apply to any Award that is granted to a California Participant
("California Award"):
 
1.               With respect to a California Award issued to any California
Participant who is not an officer, director, or consultant, such California
Award shall become exercisable at the rate of at least 20% per year over five
years from the date of Grant subject to continuous Service status.
 
2.               The following rules shall apply to any California Award in the
event of termination of the California Participant’s Service:
 
 
(a)             If such termination was for reasons other than death or
Disability or cause, the California Participant shall have at least 30 days
after the date of such termination to exercise any of his/her vested outstanding
Options (but in no event later than the expiration of the term of such Option
established by the Committee as of the Grant date).

 
 
(b)            If such termination was due to death or Disability, the
California Participant shall have at least six months after the date of such
termination to exercise any of his/her vested outstanding Options (but in no
event later than the expiration of the term of such Option established by the
Committee as of the Grant date).

 
 
(c)             Post-termination, the Company’s right to repurchase from the
California Participant any vested Shares that the California Participant has
acquired from a California Award shall include the following terms:  (A) the
Company’s right to repurchase must be exercised within the later of six months
after (i) termination of the California Participant’s Service or (ii) the date
that such Shares were purchased pursuant to an Option exercise, (B) the
repurchase price shall not be less than the Fair Market Value of the Shares as
of the date of termination, and (C) consideration for the repurchase shall
consist of cash or cancellation of purchase money indebtedness, and (D) such
repurchase right shall lapse when no longer required under California state
securities laws.

 
 
(d)            Post-termination, the Company’s right to repurchase from the
California Participant any unvested Shares that the California Participant has
acquired from a California Award shall include the following terms:  (A) the
Company’s right to repurchase must be exercised within the later of six months
after: (i) termination of the California Participant’s Service or (ii) the date
that such Shares were purchased pursuant to an Option exercise, (B) the
repurchase price shall not be less than the original purchase price of the
Shares, (C) consideration for the repurchase shall consist of cash or
cancellation of purchase money indebtedness and (D) such repurchase right shall
lapse at the rate of at least 20% of the total Shares subject to the Award over
the five year period following the date of Grant subject to the
California Participant's continuous Service status.

 

 
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3.               In the event of a stock split, reverse stock split, stock
dividend, recapitalization, combination, reclassification or other distribution
of the Company’s securities without the receipt of consideration by the Company,
then there shall be a proportionate adjustment of (i) the number of Shares
purchasable under each outstanding Option, (ii) the Exercise Price of each
outstanding Option and (iii) the number of outstanding Shares issued under the
Plan.
 
4.               Shares acquired under a California Award shall carry equal
voting rights as similar equity securities on all matters where such vote is
permitted by applicable law.
 
5.               The Company shall furnish summary financial information of the
Company’s financial condition and results of operations, consistent with the
requirements of applicable California regulations, at least annually to each
California Participant during the period such California Participant has one or
more California Awards outstanding, and in the case of a California Participant
who acquired Shares from a California Award, during the period such California
Participant owns such Shares.  The Company shall not be required to provide such
information to those California Participants whose duties in connection with the
Company assure their access to equivalent information.  The information provided
does not need to be audited financial information.
 
6.              Except if the requisite super-majority approval of at least
two-thirds of outstanding Company securities entitled to vote as provided in
section 260.140.45(a) of Title 10 of the California Code of Regulations is
obtained, at no time shall the total number of securities issuable under this
Plan exceed 30% of the Company's then outstanding securities (measured on an as
if converted basis with respect to securities convertible into Shares) as
calculated under section 260.140.45 of Title 10 of the California Code of
Regulations.
 
In addition to the above items in this Appendix A, with respect to any
California Participant who at one time was holding one or more California Awards
but no longer has any such outstanding California Awards, such California
Participant shall be required to promptly provide the Company with written
notice as soon as such California Participant no longer is holding any Shares
that were issued under a California Award.  For avoidance of doubt, the
obligation to provide this notice to the Company shall apply even if the
California Participant is no longer providing Service and/or is no longer
holding outstanding California Awards (but is holding Shares that were issued
under a California Award).  The requirements of this paragraph shall no longer
be applicable once the Company's obligations under item 5 in this Appendix A are
no longer applicable.

 
 
 
 
 
 
 
 
 
 
 
 
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