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EXHIBIT 10.11
 
 
LOCATION BASED TECHNOLOGIES, CORP.
 
2007 STOCK INCENTIVE PLAN
 
 
1.           Purpose.  The purpose of this 2007 Stock Incentive Plan (the
“Plan”) of Location Based Technologies, Corp., a California corporation (the
“Company”), is to advance the interests of the Company’s stockholders by
enhancing the Company’s ability to attract, retain and motivate persons who make
(or are expected to make) important contributions to the Company by providing
such persons with equity ownership opportunities and performance-based
incentives and thereby better aligning the interests of such persons with those
of the Company’s stockholders.  Except where the context otherwise requires, the
term “Company” shall include any of the Company’s present or future parent or
subsidiary corporations as defined in Sections 424(e) or (f) of the Internal
Revenue Code of 1986, as amended, and any regulations promulgated thereunder
(the “Code”) and any other business venture (including, without limitation,
joint venture or limited liability company) in which the Company has a
controlling interest, as determined by the Board of Directors of the Company
(the “Board”).
 
2.           Eligibility.  All of the Company’s employees, officers, directors,
consultants and advisors are eligible to be granted options, restricted stock
awards, or other stock-based awards (each, an “Award”) under the Plan.  Each
person who has been granted an Award under the Plan shall be deemed a
“Participant”.
 
3.           Administration and Delegation.
 
(a)           Administration by Board of Directors.  The Plan will be
administered by the Board.  The Board shall have authority to grant Awards and
to adopt, amend and repeal such administrative rules, guidelines and practices
relating to the Plan as it shall deem advisable.  The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or any
Award in the manner and to the extent it shall deem expedient to carry the Plan
into effect and it shall be the sole and final judge of such expediency.  All
decisions by the Board shall be made in the Board’s sole discretion and shall be
final and binding on all persons having or claiming any interest in the Plan or
in any Award.  No director or person acting pursuant to the authority delegated
by the Board shall be liable for any action or determination relating to or
under the Plan made in good faith.
 
(b)           Appointment of Committees.  To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a “Committee”).  All references
in the Plan to the “Board” shall mean the Board or a Committee of the Board or
the executive officers referred to in Section 3(c) to the extent that the
Board’s powers or authority under the Plan have been delegated to such Committee
or executive officers.
 
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(c)           Delegation to Executive Officers.  To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to grant Awards to employees or officers of the Company or any
of its present or future subsidiary corporations and to exercise such other
powers under the Plan as the Board may determine, provided that the Board shall
fix the terms of the Awards to be granted by such executive officers (including
the exercise price of such Awards, which may include a formula by which the
exercise price will be determined) and the maximum aggregate number of shares
subject to Awards that the executive officers may grant; provided further,
however, that no executive officer shall be authorized to grant Awards to any
“executive officer” of the Company (as defined by Rule 3b-7 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) or to any “officer” of
the Company (as defined by Rule 16a-1 under the Exchange Act).
 
4.           Stock Available for Awards.  Subject to adjustment under Section 8,
Awards may be made under the Plan for up to 750,000 shares of common stock of
the Company (the “Common Stock”).  If any Award expires or is terminated,
surrendered or canceled without having been fully exercised or is forfeited in
whole or in part (including as the result of shares of Common Stock subject to
such Award being repurchased by the Company at the original issuance price
pursuant to a contractual repurchase right) or results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be
available for the grant of Awards under the Plan, subject, however, in the case
of Incentive Stock Options (as hereinafter defined), to any limitations under
the Code.  Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.  Until such time as the
Common Stock meets the definition of “covered security” under Section 18 of the
Securities Act of 1933, as amended, at no time while there is any Option (as
defined below) outstanding and held by a Participant who was a resident of the
State of California on the date of grant of such Option, shall the total number
of shares of Common Stock issuable upon exercise of all outstanding options and
the total number of shares provided for under any stock bonus or similar plan of
the Company exceed the applicable percentage as calculated in accordance with
the conditions and exclusions of Section 260.140.45 of the California Code of
Regulations, based on the shares of the Company which are outstanding at the
time the calculation is made.
 
5.           Stock Options.
 
(a)           General.  The Board may grant options to purchase Common Stock
(each, an “Option”) and determine the number of shares of Common Stock to be
covered by each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.  An Option which is not intended to be an Incentive
Stock Option (as hereinafter defined) shall be designated a “Nonstatutory Stock
Option”.
 
(b)           Incentive Stock Options.  An Option that the Board intends to be
an “incentive stock option” as defined in Section 422 of the Code (an “Incentive
Stock Option”) shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code.  The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
 
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(c)           Exercise Price.  The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement, but in no event shall it be less than 85% of the Fair Market Value of
the Company’s Common Stock on the date of grant for Nonstatutory Stock Options
or 100% of the Fair Market Value for Incentive Stock Options (110% for persons
owning more than 10% of the total voting power of all classes of the Company’s
outstanding stock).  Fair Market Value shall be determined in a manner not
inconsistent with Section 260.140.50 of the California Code of Regulations.
 
(d)           Duration of Options.  Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement.
 
(e)           Exercise of Option.  Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.
 
(f)           Payment Upon Exercise.  Common Stock purchased upon the exercise
of an Option granted under the Plan shall be paid for as follows:
 
(1)           in cash or by check, payable to the order of the Company;
 
(2)           except as the Board may, in its sole discretion, otherwise provide
in an option agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding or
(ii) delivery by the Participant to the Company of a copy of irrevocable and
unconditional instructions to a creditworthy broker to deliver promptly to the
Company cash or a check sufficient to pay the exercise price and any required
tax withholding;
 
(3)           when the Common Stock is registered under the Securities Exchange
Act of 1934 (the “Exchange Act”), by delivery of shares of Common Stock owned by
the Participant valued at their Fair Market Value as determined by (or in a
manner approved by) the Board in good faith, provided (i) such method of payment
is then permitted under applicable law and (ii) such Common Stock, if acquired
directly from the Company, was owned by the Participant at least six months
prior to such delivery;
 
(4)           to the extent permitted by the Board, in its sole discretion by
(i) delivery of a promissory note of the Participant to the Company on terms
determined by the Board, or (ii) payment of such other lawful consideration as
the Board may determine;
 
(5)           by the Optionee directing the Company to withhold from shares
which the Optionee would have received upon exercise of an Option a number of
shares having a Fair Market Value equal to the exercise price of such Option
(so-called “cashless exercise”); or
 
(6)           by any combination of the above permitted forms of payment.
 
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(g)           Substitute Options.  In connection with a merger or consolidation
of an entity with the Company or the acquisition by the Company of property or
stock of an entity, the Board may grant Options in substitution for any options
or other stock or stock-based awards granted by such entity or an affiliate
thereof.  Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.
 
6.           Restricted Stock.
 
(a)           Grants.  The Board may grant Awards entitling recipients to
acquire shares of Common Stock, subject to the right of the Company to
repurchase all or part of such shares at their issue price or other stated or
formula price (or to require forfeiture of such shares if issued at no cost)
from the recipient in the event that conditions specified by the Board in the
applicable Award are not satisfied prior to the end of the applicable
restriction period or periods established by the Board for such Award (each, a
“Restricted Stock Award”).
 
(b)           Terms and Conditions.  The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any.
 
(c)           Stock Certificates.  Any stock certificates issued in respect of a
Restricted Stock Award shall be registered in the name of the Participant and,
unless otherwise determined by the Board, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee).  At
the expiration of the applicable restriction periods, the Company (or such
designee) shall deliver the certificates no longer subject to such restrictions
to the Participant or if the Participant has died, to the beneficiary
designated, in a manner determined by the Board, by a Participant to receive
amounts due or exercise rights of the Participant in the event of the
Participant’s death (the “Designated Beneficiary”).  In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant’s estate.
 
7.           Other Stock-Based Awards.   The Board shall have the right to grant
other Awards based upon the Common Stock having such terms and conditions as the
Board may determine, including the grant of shares based upon certain
conditions, the grant of securities convertible into Common Stock and the grant
of stock appreciation rights.
 
8.           Adjustments for Changes in Common Stock and Certain Other Events.
 
(a)           Changes in Capitalization.  In the event of any stock split,
reverse stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the number and class of securities and exercise price per share subject to
each outstanding Option, (iii) the repurchase price per share subject to each
outstanding Restricted Stock Award, and (iv) the terms of each other outstanding
Award shall be appropriately adjusted by the Company (or substituted Awards may
be made, if applicable) to the extent the Board shall determine, in good faith,
that such an adjustment (or substitution) is necessary and appropriate.  If this
Section 8(a) applies and Section 8(c) also applies to any event, Section 8(c)
shall be applicable to such event, and this Section 8(a) shall not be
applicable.
 
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(b)           Liquidation or Dissolution.  In the event of a proposed
liquidation or dissolution of the Company, the Board shall upon written notice
to the Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least ten business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date.  The Board may specify the effect of a liquidation
or dissolution on any Restricted Stock Award or other Award granted under the
Plan at the time of the grant of such Award.
 
(c)           Reorganization Events.
 
(1)           Definition.  A “Reorganization Event” shall mean:  (a) any merger
or consolidation of the Company with or into another entity as a result of which
all of the Common Stock of the Company is converted into or exchanged for the
right to receive cash, securities or other property or (b) any exchange of all
of the Common Stock of the Company for cash, securities or other property
pursuant to a share exchange transaction.
 
(2)           Consequences of a Reorganization Event on Options.  Upon the
occurrence of a Reorganization Event, or the execution by the Company of any
agreement with respect to a Reorganization Event, the Board shall provide that
this Plan and all outstanding Options shall be assumed, or equivalent options
shall be substituted, by the acquiring or succeeding corporation (or an
affiliate thereof).  For purposes hereof, an Option shall be considered to be
assumed if, following consummation of the Reorganization Event, the Option
confers the right to purchase, for each share of Common Stock subject to the
Option immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the consideration received as a result
of the Reorganization Event is not solely common stock of the acquiring or
succeeding corporation (or an affiliate thereof), the Company may, with the
consent of the acquiring or succeeding corporation, provide for the
consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate
thereof) equivalent in fair market value to the per share consideration received
by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.
 
Notwithstanding the foregoing, if the acquiring or succeeding corporation (or an
affiliate thereof) does not agree to assume this Plan, or assume or substitute
for, such Options, then the Board shall, upon written notice to the
Participants, provide that all then unexercised Options will become exercisable
in full as of a specified time prior to the Reorganization Event and will
terminate immediately prior to the consummation of such Reorganization Event,
except to the extent exercised by the Participants before the consummation of
such Reorganization Event; provided, however, that in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Reorganization Event (the “Acquisition Price”),
then the Board may instead provide that all outstanding Options shall terminate
upon consummation of such Reorganization Event and that each Participant shall
receive, in exchange therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of shares of Common
Stock subject to such outstanding Options (whether or not then exercisable),
exceeds (B) the aggregate exercise price of such Options.  To the extent all or
any portion of an Option becomes exercisable solely as a result of the first
sentence of this paragraph, upon exercise of such Option the Participant shall
receive shares subject to a right of repurchase by the Company or its successor
at the Option exercise price.  Such repurchase right (1) shall lapse at the same
rate as the Option would have become exercisable under its terms and (2) shall
not apply to any shares subject to the Option that were exercisable under its
terms without regard to the first sentence of this paragraph.
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If any Option provides that it may be exercised for shares of Common Stock which
remain subject to a repurchase right in favor of the Company, upon the
occurrence of a Reorganization Event, any shares of restricted stock received
upon exercise of such Option shall be treated in accordance with Section 8(c)(3)
as if they were a Restricted Stock Award.
 
(3)           Consequences of a Reorganization Event on Restricted Stock
Awards.  Upon the occurrence of a Reorganization Event, the repurchase and other
rights of the Company under each outstanding Restricted Stock Award shall inure
to the benefit of the Company’s successor and shall apply to the cash,
securities or other property which the Common Stock was converted into or
exchanged for pursuant to such Reorganization Event in the same manner and to
the same extent as they applied to the Common Stock subject to such Restricted
Stock Award.
 
(4)           Consequences of a Reorganization Event on Other Awards.  The Board
shall specify the effect of a Reorganization Event on any other Award granted
under the Plan at the time of the grant of such Award.
 
9.           General Provisions Applicable to Awards.
 
(a)           Transferability of Awards.  Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant.  References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
 
(b)           Documentation.  Each Award shall be evidenced in such form
(written, electronic or otherwise) as the Board shall determine.  Each Award may
contain terms and conditions in addition to those set forth in the Plan.
 
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(c)           Board Discretion.  Except as otherwise provided by the Plan, each
Award may be made alone or in addition or in relation to any other Award.  The
terms of each Award need not be identical, and the Board need not treat
Participants uniformly.
 
(d)           Termination of Status.  The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant’s legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
 
(e)           Withholding.  Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability.  Except as the Board may otherwise
provide in an Award, when the Common Stock is registered under the Exchange Act,
Participants may satisfy such tax obligations in whole or in part by delivery of
shares of Common Stock, including shares retained from the Award creating the
tax obligation, valued at their Fair Market Value; provided, however, that the
total tax withholding where stock is being used to satisfy such tax obligations
cannot exceed the Company’s minimum statutory withholding obligations (based on
minimum statutory withholding rates for federal and state tax purposes,
including payroll taxes, that are applicable to such supplemental taxable
income).  Company may, to the extent permitted by law, deduct any such tax
obligations from any payment of any kind otherwise due to a Participant.
 
(f)           Amendment of Award.  The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant’s consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
 
(g)           Conditions on Delivery of Stock.  The Company will not be
obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove restrictions from shares previously delivered under the Plan until (i)
all conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
 
(h)           Acceleration.  The Board may at any time provide that any Award
shall become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
 
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10.           Miscellaneous.
 
(a)           No Right To Employment or Other Status.  No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company.  The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
 
(b)           No Rights As Stockholder.  Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any rights
as a stockholder with respect to any shares of Common Stock to be distributed
with respect to an Award until becoming the record holder of such
shares.  Notwithstanding the foregoing, in the event the Company effects a split
of the Common Stock by means of a stock dividend and the exercise price of and
the number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
 
(c)           Effective Date and Term of Plan.  The Plan shall become effective
on the date on which it is adopted by the Board.  No Awards shall be granted
under the Plan after the completion of ten years from the earlier of (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was
approved by the Company’s stockholders, but Awards previously granted may extend
beyond that date.
 
(d)           Amendment of Plan.  The Board may amend, suspend or terminate the
Plan or any portion thereof at any time.
 
(e)           Authorization of Sub-Plans.  The Board may from time to time
establish one or more sub-plans under the Plan for purposes of satisfying
applicable blue sky, securities or tax laws of various jurisdictions.  The Board
shall establish such sub-plans by adopting supplements to this Plan containing
(i) such limitations on the Board’s discretion under the Plan as the Board deems
necessary or desirable or (ii) such additional terms and conditions not
otherwise inconsistent with the Plan as the Board shall deem necessary or
desirable.  All supplements adopted by the Board shall be deemed to be part of
the Plan, but each supplement shall apply only to Participants within the
affected jurisdiction and the Company shall not be required to provide copies of
any supplement to Participants in any jurisdiction which is not the subject of
such supplement.
 
(f)           Governing Law.  The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the State of California, without regard to any applicable conflicts of law;
provided however, if this Plan and the Awards associated herewith are assumed by
an acquiring corporation or other business entity pursuant to Section 8(c)
hereof, the governing law shall be that of the state of incorporation of the
acquiring entity.
 
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LOCATION BASED TECHNOLOGIES, CORP.
 
2007 STOCK INCENTIVE PLAN
 
CALIFORNIA SUPPLEMENT
 
 
Pursuant to Section 10(e) of the Plan, the Board has adopted this supplement for
purposes of satisfying certain rules of the California Corporations
Commissioner.
 
Any Awards granted under the Plan to a Participant who is a resident of the
State of California on the date of grant (a “California Participant”) shall be
subject to the following additional limitations, terms and conditions:
 
1.           Additional Limitations on Options.
 
(a)           Forfeitures. Options granted to California Participants may be
subject to such reasonable forfeiture conditions as the Board may choose to
impose and which are not inconsistent with Section 260.140.41 of the California
Code of Regulations.
 
(b)           Maximum Duration of Options.  No Options granted to California
Participants will be granted for a term in excess of ten years.
 
(c)           Minimum Exercise Period Following Termination.  Unless a
California Participant’s employment is terminated for cause (as defined in any
contract of employment between the Company and such Participant, or if none, in
the instrument evidencing the grant of such Participant’s Option), in the event
of termination of employment of such Participant, he or she shall have the right
to exercise an Option, to the extent that he or she was otherwise entitled to
exercise such Option on the date employment terminated, as follows:  (i) at
least six months from the date of termination, if termination was caused by such
Participant’s death or “permanent and total disability” (within the meaning of
Section 22(e)(3) of the Code) and (ii) at least 30 days from the date of
termination, if termination was caused other than by such Participant’s death or
“permanent and total disability” (within the meaning of Section 22(e)(3) of the
Code).
 
(d)           Limitation on Repurchase Rights.  If an Option granted to a
California Participant gives the Company the right to repurchase shares of
Common Stock issued pursuant to the Plan upon termination of employment of such
Participant, the terms of such repurchase right must comply with Section
260.140.41(k) of the California Code of Regulations.
 
2.           Additional Limitations for Restricted Stock Awards.
 
(a)           Minimum Purchase Price.  The purchase price for a Restricted Stock
Award granted to a California Participant shall be not less than 85% of the Fair
Market Value of the Common Stock at the time such Participant is granted the
right to purchase shares under the Plan or at the time the purchase is
consummated; provided, however, that if such Participant is a person who owns
stock possessing more than ten percent of the total combined voting power or
value of all classes of stock of the Company or its parent or subsidiary
corporations, the purchase price shall be not less than 100% of the Fair Market
Value of the Common Stock at the time such Participant is granted the right to
purchase shares under the Plan or at the time the purchase is consummated.
 
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(b)           Limitation of Repurchase Rights.  If a Restricted Stock Award
granted to a California Participant gives the Company the right to repurchase
shares of Common Stock issued pursuant to the Plan upon termination of
employment of such Participant, the terms of such repurchase right must comply
with Section 260.140.42(h) of the California Code of Regulations.
 
3.           Additional Limitations for Other Stock-Based Awards.  The terms of
all Awards granted to a California Participant under Section 7 of the Plan shall
comply, to the extent applicable, with Section 260.140.41 or Section 260.140.42
of the California Code of Regulations.
 
4.           Additional Requirement to Provide Information to California
Participants.  The Company shall provide to each California Participant and to
each California Participant who acquires Common Stock pursuant to the Plan, not
less frequently than annually, copies of annual financial statements (which need
not be audited).  The Company shall not be required to provide such statements
to key employees whose duties in connection with the Company assure their access
to equivalent information.  When the Company has a class of equity securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended,
such financial statements shall be deemed provided when the Company notifies
California Participants that its Annual Report of Form 10-K or Form 10-KSB is
available on the website of the Securities and Exchange Commission.
 
5.           Additional Limitations on Timing of Awards.  No Award granted to a
California Participant shall become exercisable, vested or realizable, as
applicable to such Award, unless the Plan has been approved by the Company’s
stockholders within 12 months before or after the date the Plan was adopted by
the Board.
 
6.           Additional Limitations Relating to Definition of Fair Market
Value.  For purposes of Section 1(b) and 2(a) of this supplement, “Fair Market
Value” shall be determined in a manner not inconsistent with Section 260.140.50
of the California Code of Regulations.
 
7.           Additional Restriction Regarding Recapitalizations, Stock Splits,
Etc.  For purposes of Section 8 of the Plan, in the event of a stock split,
reverse stock split, stock dividend, recapitalization, combination,
reclassification or other distribution of the Company’s securities, the number
of securities allocated to each California Participant must be adjusted
proportionately and without the receipt by the Company of any consideration from
any California participant.
 
 
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