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PRISTINE SOLUTIONS, INC. 8-K [pris-8k_082312.htm]

 
Exhibit 10.4

ESOP
 
EMPLOYEE STOCK OPTION PLAN

 
 
 
STOCK OPTION PLAN OF
 
PRISTINE SOLUTIONS, INC.
 
SEPTEMBER 1, 2012
 

 
 

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Table of Contents
 
 
GENERAL
    1            
ADMINISTRATION OF THE PLAN
    5            
ELIGIBILITY OF PARTICIPANTS
    6            
SHARES SUBJECT TO PLAN
    6            
GRANT OF OPTIONS
    7            
TERMS AND CONDITIONS OF OPTIONS
    8            
TERMINATION OF OPTIONS
    11            
     Termination Before Option Becomes Exercisable.
    12            
     Discharge or Resignation.
    12            
CERTAIN TAX MATTERS
    14            
MISCELLANEOUS
    15             Pristine Solutions, Inc. Employee Stock Option Plan    
 Confidential 09-01-12 

 
 

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PRISTINE SOLUTIONS, INC.
2012 STOCK OPTION PLAN
 
ARTICLE 1 
GENERAL
 
Purpose of Plan.  The Pristine Solutions, Inc. (“PRISTINE”) 2012 Stock Option
Plan is intended to encourage ownership of Shares of PRISTINE by certain
employees of the Company or of its Parent or its Subsidiaries and certain other
Persons, to provide additional incentive for them to remain in the employ of the
Company or its Parents or Subsidiaries, and to promote the growth and success of
the Company and such Parents and Subsidiaries.  It is intended that the Options
issued pursuant to the Plan shall constitute either incentive stock options
within the meaning of Section 422 of the Code and the regulations thereunder or
non-incentive stock options.
 
Definitions.  Whenever used herein, the following terms shall have the following
meanings unless the context clearly indicates another meaning:
 
“Board” - the Board of Directors of the Company.
 
“Business Day” - any day other than a Saturday, a Sunday, or a day on which
banking institutions in the State of Nevada are authorized or obligated by law
or executive order to remain closed.
 
“Code” - the Internal Revenue Code of 1986, as amended.
 
“Committee” - the Board or, at the option of the Board, a committee designated
by the Board, which committee shall consist of not less than one member of the
Board who shall be appointed by and serve at the pleasure of the Board.  Members
of the Committee who are Eligible Individuals shall be eligible for grants of
Options; provided that any such grant is approved by a majority of the other
members of the Committee.  During any period of time in which the Company is
subject to the reporting requirements of the Exchange Act, the Committee shall
be comprised solely of not less than two members, each of whom shall be (i) a
“non-employee director” within the meaning of Rule 16b-3 promulgated under the
Exchange Act, as amended, and (ii) unless otherwise determined by the Board, an
“outside director” within the meaning of Treasury Regulation Section
1.162-27(e)(3) and Section 162(m) of the Code.
 
“Company” – Pristine Solutions, Inc. a Nevada corporation
 
“Corporate Parent” - with respect to any Option, any corporation (other than the
Company) in an unbroken chain of corporations ending with the Company if, at the
time such Option is granted, each of the corporations other than the Company
owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one or more of the other corporations in such chain.
 
“Corporate Subsidiary” - with respect to any Option, any corporation (other than
the Company) in an unbroken chain of corporations beginning with the Company if,
at the time such Option is granted, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one or more of the other
corporations in such chain.
 
 
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“Date of Grant” - with respect to any Option, the date on which such Option is
deemed, granted pursuant to Section 5.2.
 
“Disability” - permanent and total disability as defined in the employment
agreement (or any successor agreement).
 
“Eligible Individual” - (i) a Key Employee or (ii) any other Person that the
Committee designates as eligible to receive a Non-incentive Stock Option (or, to
the extent Incentive Stock Options may be granted to such Persons, an Incentive
Stock Option) because such other Person performs services for the Company or any
of Its Parents or Subsidiaries (other than services in connection with the offer
or sale of securities in a capital-raising transaction) and the Committee
determines that the Person has a direct and significant effect on the financial
development of the Company or any of its Parents or Subsidiaries, but excluding,
under (i) and/or (ii), any Person that the Board may from time to time specify
as ineligible.
 
“Eligible Employer” - the Company.
 
“Employee-Participant” - a Participant who is, at the Date of Grant of the
relevant Option, an employee of an Eligible Employer.
 
“Exchange Act” — the Securities Exchange Act of 1934, as amended.
 
“Fair Market Value” – (a) if Shares are listed on a national securities
exchange, the last reported sales price, regular way, on the composite tape of
the principal national securities exchange on which the Shares are so listed on
the most recent Business Day prior to the date in question for which such price
is available; (b) if clause (a) does not apply but the Shares are admitted to
trading in the NASDAQ-National Market System (or a similar system then in use),
the last reported sales price, regular way, on the NASDAQ-National Market System
(or such similar system) on the most recent Business Day prior to the date in
question for which such price is available; (c) if neither clause (a) or (b)
applies but the Shares are traded in the over-the-counter market and bid and
asked prices are reported by NASDAQ or any comparable system, the average of the
closing bid and asked prices of Shares in the over-the-counter market as
reported by NASDAQ or any comparable system on the most recent Business Day
prior to the date in question for which such prices are available; (d) if none
of clauses (a), (b), or (c) applies but bid and asked prices for the Shares are
furnished by members of the FINRA, the average of the closing bid and asked
prices as furnished by two members of the FINRA (selected from time to time by
the Committee for that purpose) on the most recent Business Day prior to the
date in question for which such prices are available; and (e) if none of clauses
(a), (b), (c), or (d) applies, the fair market value of the Share as determined
by the Committee from time to time.
 
“Incentive Stock Option” - an option to purchase Shares granted pursuant to the
Plan that is an “incentive stock option” within the meaning of Section 422 of
the Code.
 
 
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“Initial Public Offering” - the consummation of a sale of Shares (by the Company
or shareholders or a combination thereof) that is registered on a registration
statement (other than a registration statement on Form S-8 or its equivalent)
filed with the Securities and Exchange Commission pursuant to the Securities Act
of 1933, pursuant to which the Company receives at least $10 million.
 
“Issuable Number” - at any time, the Maximum Number less the number of Shares
theretofore issued or delivered under the Plan (appropriately adjusted to give
effect to any changes in capitalization or Reorganization).
 
“Key Employee” - any employee of an Eligible Employer who the Committee
determines is key to the operations of an Eligible Employer.
 
“Maximum Number” - the maximum number of Shares that may be issued or delivered
under the Plan, which is 25,000,000 (subject to adjustment as set forth in
Sections 9.6 and 9.7 hereof).
 
“FINRA” – Financial Industry Regulatory Authority.
 
“NASDAQ” - NASD Automated Quotation System.
 
“Non-Incentive Stock Option” - an option to purchase Shares granted pursuant to
the Plan that is not an Incentive Stock Option.
 
“Option” - an option to purchase Shares granted pursuant to the Plan that is an
Incentive Stock Option or a Non-Incentive Stock Option.
 
“Option Agreement” - the agreement, substantially in the form attached hereto as
Exhibit B (or such other form as may be approved by the Committee for use under
the Plan pursuant to Section 2.1 hereof), between the Company and a Participant
evidencing the grant of an Option under the Plan and containing the terms and
conditions, not inconsistent with the Plan, that are applicable to such Option.
 
“Parent” - any Person (other than the Company) in an unbroken chain of Persons
ending with the Company if, at the time such Option is granted, each of the
Persons other than the Company owns stock (or other equity interests) possessing
50% or more of the total combined voting power of all classes of stock (or other
equity interests) in one or more of the other Persons in such chain.
 
“Participant” - an Eligible Individual to whom an Option is granted under the
Plan.
 
“Person” - any natural person, corporation, partnership, limited partnership,
Limited Liability Company, joint venture, or other entity.
 
“Plan” – the Pristine Solutions, Inc. 2012 Stock Option Plan, as set forth
herein and as it may be amended from time to time.
 
“Reorganization” - any merger or consolidation in which the Company is not the
surviving Person (other than a merger of the Company into a wholly-owned
subsidiary of the Company) or in which the holders of Shares receive cash,
shares of another Person, a different class of shares of the Company, or other
property; the sale of all or substantially all of the assets of the Company; or
the sale, pursuant to an agreement with the Company, of Shares of the Company
pursuant to which another Person acquires Shares that, after consummation of
such sale, are 50% or more of the outstanding Shares of the Company.
 
 
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“Securities Act” – the Securities Act of 1933, as amended.
 
“Share” - a share of the Company’s present Common Stock, par value $.001 per
share, and any share or shares of capital stock or other securities of the
Company hereafter issued or delivered or issuable or deliverable upon, in
respect of, in substitution of, or in exchange for each present share.
 
“Shareholders’ Agreement” - that certain Shareholders’ Agreement executed as of
September 1, 2012 for Messrs.’ Borkowski and Stark and October 1, 2012 for
Berman, by the Company, Michael J. Borkowski, Dr. Jennifer Berman, Dr. David
Starke, and, possibly others, as the same may be amended at the relevant time, a
copy of the current version of which is attached as Exhibit A hereto.
 
“Subsidiary” - any Person (other than the Company) in any unbroken chain of
Persons beginning with the Company if, at the time of granting of the Option,
each of the Persons (other than the last Person in the unbroken chain) owns
stock (or other equity interests) possessing 50% or more of the total combined
voting power of all classes of stock (or other equity interests) in one of the
other Persons in such chain.
 
“Treasury Regulations” - the regulations promulgated by the United States
Department of the Treasury pursuant to and in respect of provisions of the
Code.  All references herein to sections of the Treasury Regulations shall
include any corresponding provisions of succeeding, similar, substitute,
proposed, temporary, or final Treasury Regulations.
 
“Vesting Schedule” - a schedule on which an Option becomes exercisable as to a
specific number of Shares subject to such Option.
 
ARTICLE 2
 ADMINISTRATION OF THE PLAN
 
Administration.  The Plan shall be administered by the Committee.  Subject to
the provisions of the Plan, the Committee is authorized to take the following
action, in addition to each other action that the Committee is expressly
authorized to take pursuant to the Plan:
 
(a) determine who is an Eligible Individual and determine the Eligible
Individuals to whom Options are to be granted;
 
(b) determine the number of Shares to be covered by each of the Options, the
time or times at which Options shall be granted and exercisable and terminate,
the exercise price for Shares subject to the Options, whether such Options shall
be Incentive Stock Options or Non-Incentive Stock Options, and the other terms
and provisions of each Option Agreement (which need not be the identical);
 
 
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(c) interpret the Plan provisions;
 
(d) terminate the Plan;
 
(e) adopt, amend, and rescind rules and regulations relating to the Plan and the
functioning of the Committee;
 
(f) determine the Fair Market Value of Shares;
 
(g) accelerate the vesting of Options;
 
(h) rely on the employees of the Company for such clerical and record-keeping
duties as may be necessary or desirable in connection with the administration of
the Plan; and
 
(i) make all other determinations and take all other actions necessary or
advisable for the administration of the Plan.
 
Absolute Discretion.  All questions of interpretation and application of the
Plan or any Option Agreement or pertaining to any Option granted hereunder shall
be subject to the determination by a majority of the members of the Committee
acting with absolute discretion.
 
No Liability for Good Faith Determinations.  No member of the Committee shall be
liable for any act, omission, or determination taken or made in good faith with
respect to the Plan or any Option, and members of the Committee shall be
entitled to indemnification and reimbursement by the Company in respect of any
claim, loss, damage, or expense (including attorneys’ fees, and the costs of
settling any suit if such settlement is approved by independent legal counsel
selected by the Company), and amounts paid in satisfaction of a judgment (except
a judgment based on a finding of bad faith) arising therefrom to the full extent
permitted by law and under any directors and officers liability or similar
insurance coverage that may from time to time be in effect.  This right to
indemnification shall be in addition to, and not a limitation on, any other
indemnification rights any member of the Committee may have.
 
No Liability of Company.  The Company assumes no obligation or responsibility to
any Participant for any act of, or failure to act on the part of, the Committee.
 
ARTICLE 3 
ELIGIBILITY OF PARTICIPANTS
 
Participants.  An Option may be granted pursuant to the Plan only to a Person
who is an Eligible Individual at the Date of Grant of such Option.
 
Factors in Determination.  In making any determination as to whether a Person is
an Eligible Individual, as to whether an Eligible Individual will be granted an
Option, and as to the number of Shares to be covered by such Option, the
Committee shall take into account the duties of such Person, the present and
potential contributions of such Person to the growth and success of the Company
and its Parents or Subsidiaries, and such other factors as the Committee shall
deem relevant in connection with accomplishing the purposes of the Plan.  The
Committee shall not be precluded from approving the grant of an Option to any
Eligible Individual solely because such Person may previously have been granted
an Option under the Plan.
 
 
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ARTICLE 4 
SHARES SUBJECT TO PLAN
 
Shares.  At no time shall the number of Shares subject to outstanding Options be
greater than the Issuable Number.  The Company shall cause the Issuable Number
of Shares to be reserved for issuance or delivery under the Plan at all times
the Plan is in effect.
 
Expiration or Cancellation of Options; Tendered Shares.  Should any Option
expire or be canceled without being fully exercised, the number of Shares with
respect to which such Option shall not have been exercised prior to its
expiration or cancellation will again be available for the granting of Options
pursuant to the provisions hereof.  Furthermore, if the exercise price of any
Option granted under the Plan is satisfied by tendering Shares (by either actual
delivery or by attestation), only the number of Shares issued net of the Shares
tendered shall be deemed delivered for purposes of determining the Issuable
Number; provided, however, that any increase in the Issuable Number resulting
from the application of this sentence shall be reserved for issuance of Shares
in satisfaction of Non-Incentive Stock Options only.
 
Description of Shares.  The Shares to be delivered under the Plan shall be made
available from (a) authorized but unissued Shares, (b) Shares held in the
treasury of the Company, or (c) previously issued Shares reacquired by the
Company, including Shares purchased on the open market, as the Board or the
Committee may, in each situation, determine from time to time in its sole
discretion.
 
ARTICLE 5 
GRANT OF OPTIONS
 
Decision of Committee.  From time to time the Committee shall, in its sole
discretion but subject to all of the provisions of the Plan, determine which
Eligible Individuals will be granted Options, the number of Shares subject to
Options, and the terms and conditions of the Options, including whether the
Options will be Incentive Stock Options or Non-Incentive Stock Options.  The
terms and conditions of an Option need not be the same for any other Option.
 
Date of Grant.  The date of the Agreement shall be the date on which the Option
is deemed granted.  In no event shall a Participant gain any rights in addition
to those specified by the Committee in its grant, regardless of the time that
may pass between the grant of the Option and the actual acceptance of the offer
of the Option and execution of the Option Agreement by the Company and the
Participant.
 
Acceptance of Grant.  Each Eligible Individual granted an Option pursuant to
Section 5.1 shall have an opportunity to accept or reject the grant of the
Option.  Execution and delivery of an Option Agreement relating to an Option
shall qualify as such written acceptance.  Each Eligible Individual who
indicates a desire to accept the grant of the Option offered to him or her must
enter into an Option Agreement pursuant to Section 6.1 hereof as a condition to
such acceptance.
 
 
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Limitation of Time of Grant.  In no event shall any Incentive Stock Option be
granted hereunder after the date that is ten years after the earlier of (a) the
date the Plan is adopted by the Board and (b) the date the Plan is approved by
the shareholders of the Company pursuant to Section 9.1.
 
Limitation on Incentive Stock Options.  Notwithstanding any other provision
contained herein to the contrary, no Incentive Stock Option shall be granted to
an Eligible Individual under the Plan to the extent it, together with all other
incentive stock options granted by the Company or any of its Parents or
Subsidiaries to such Eligible Individual, would relate to Shares that, in the
calendar year they first become purchasable, have a Fair Market Value, at the
Date of the Grant, in excess of $100,000.  Notwithstanding the above, to the
extent that the $100,000 limit is exceeded, the Option shall automatically be
deemed to be a Non-Incentive Stock Option.
 
Limitation on Recipients of Grant.  Notwithstanding any other provision
contained herein to the contrary, in no event shall any Eligible Individual
owning directly or indirectly (pursuant to Code Section 424) more than 10% of
the total combined voting power of the Company or any Corporate Subsidiary (a
“10% Holder”) be granted an Incentive Stock Option hereunder unless (a) the
exercise price is at least 110% of the Fair Market Value of the Shares at the
Date of Grant of the Option and (b) the term of the Option does not exceed five
years from the Date of Grant.  Notwithstanding any other provision contained
herein to the contrary, in no event shall any Incentive Stock Option (or an
incentive stock option under any other plan of the Company or a Subsidiary) be
granted to any Eligible Individual unless such Eligible Individual is a Key
Employee of the Company or a Corporate Parent or Corporate Subsidiary of the
Company.
 
ARTICLE 6 
TERMS AND CONDITIONS OF OPTIONS
 
Option Agreement.  Each Option granted under the Plan shall be evidenced by an
Option Agreement, in such form as the Committee may prescribe, setting forth the
tens and conditions of the Options, consistent with the provisions of the
Plan.  The Option Agreement shall identify the Option granted as either an
Incentive Stock Option or a Non-Incentive Stock Option.
 
Number of Shares.  Each Option Agreement shall specify the number of Shares
subject to each Option.
 
Exercise Price.  The exercise price for each Share purchased under any Option
shall be specified in the Option Agreement relating to such Option, which shall
not be less than the par value of a Share and, in the case of an Incentive Stock
Option, shall also not be less than 100% of the Fair Market Value of a Share on
the Date of Grant.
 
Payment of Exercise Price.  Payment of the exercise price for Shares purchased
under the Plan shall be made upon the exercise of an Option and may be paid to
the Company:
 
(a) in cash (including check, bank draft, or money order); or
 
(b) at the discretion of the Committee, or if the Option Agreement so provides,
by the delivery of Shares of the Company owned by the Participant (including
Shares received upon exercise of such Option) that have a Fair Market Value on
the date of exercise equal to the aggregate exercise price;
 
 
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(c) at the discretion of the Committee, or if the Option Agreement so provides,
by the delivery of a promissory note in the principal amount of the aggregate
exercise price and having such other terms as are determined by the Committee or
provided in the Option Agreement; or
 
(d) at the discretion of the Committee, or if the Option Agreement so provides,
by a combination of the foregoing.
 
Vesting.  If the relevant Option Agreement does not specify a Vesting Schedule
but (assuming no event of the type described in Article VII that would shorten
or extend such term occurs during such term) has a term of at least five years
from the Date of Grant, the Option shall become exercisable with respect to
cumulative quantities of 20% of the Shares subject thereto on the first, second,
third, fourth, and fifth anniversary dates of the Date of Grant (subject to
adjustment as contemplated by Article VII).
 
Modification, Extension, and Renewal of Options.  Subject to the terms and
conditions of and within the limitations of the Plan and any consent required by
the last two sentences of this Section, the Committee may (a) modify, extend, or
renew outstanding Options, (b) accept the surrender of outstanding Options (to
the extent not previously exercised) and authorize the granting of new Options
(including those with a higher or lower exercise price) in substitution for
outstanding Options (to the extent not previously exercised), and (c) amend the
terms of an Incentive Stock Option at any time to include provisions that have
the effect of changing the Incentive Stock Option to a Non-incentive Stock
Option.  Nevertheless, without the consent of the Participant, the Committee may
not modify any outstanding Option so as to specify a higher or lower exercise
price or accept the surrender of outstanding Incentive Stock Options and
authorize the granting of new Options in substitution therefor specifying a
higher or lower exercise price.  In addition, no modification of an Option
shall, without the consent of the Participant, alter or impair any rights or
obligations under any Option theretofore granted hereunder to such Participant
except, with respect to Incentive Stock Options, as may be necessary to satisfy
the requirements of Section 422 of the Code.
 
Exercise of Options Generally.  An Option may be exercised only by written
notice of exercise delivered to the Company during the term of the Option, which
notice shall (a) state the number of Shares with respect to which the Option is
being exercised, (b) be signed by the Participant (or, if the Participant is
dead or Disabled, by the Person, if any, authorized to exercise the Option
pursuant to the Plan and, if signed by a Person other than the Participant, be
accompanied by or contain satisfactory evidence of such Person’s right to
exercise the Option), (c) be accompanied by payment of the appropriate exercise
price and by payment in full of all the applicable taxes required to be withheld
with respect to such exercise, (d) state the Social Security number of the
Participant or other Person exercising the Option as contemplated by clause (b)
above, and (e) include or be accompanied by such other information, instruments,
agreements, and documents required to satisfy any other condition to exercise
specified in the Plan (including but not limited to those contained in Section
6.9, 6.10, and 6.15) or the Option Agreement.  Unless otherwise consented to by
the Committee, an Option shall not be deemed exercised until the requirements of
this Section are completely fulfilled.
 
 
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Certain Conditions to Exercise and Delivery of Stock.  Nothing herein or in any
Option or any Option Agreement shall require the Company to issue or deliver any
Shares if that issuance or delivery would, in the opinion of counsel for the
Company, constitute a violation of the Securities Act or any similar or
superseding statute or statutes, any other applicable statute or regulation, or
the rules of any applicable securities exchange or securities association, in
each case, as then in effect.  The Company may, as a condition precedent to the
exercise of an Option, require from the Participant (or in the event of the
death or Disability of the Participant, the Participant’s legal representatives,
heirs, legatees, or distributees) such written representations, if any,
concerning the Participant’s (or such other Person’s) intentions with regard to
the retention or disposition of the Shares being acquired and such written
covenants and agreements, if any, as to the manner of disposal of such Shares
as, in the opinion of counsel to the Company, may be necessary to ensure that
any disposition by that Participant (or in the event of the death or Disability
of the Participant, the Participant’s legal representatives, heirs, legatees, or
distributees), will not involve a violation of the Securities Act or any similar
or superseding statute or statutes, any other applicable state or federal
statute or regulation, or any rule of any applicable securities exchange or
securities association, in each case, as then in effect.
 
Additional Restrictions on Exercise.  The exercise of each Option granted under
the Plan shall be subject to the condition that if at any time the Company or
the Committee shall determine, in its sole discretion, that (a) the satisfaction
of withholding taxes or other withholding liabilities, (b) the listing,
registration, or qualification of any Shares otherwise deliverable upon such
exercise on any securities exchange or under any state or federal law, or (c)
the consent or approval of any regulatory body is necessary or desirable as a
condition of, or in connection with, such exercise or the delivery or purchase
of Shares thereunder, then in any such event such exercise shall not be
effective unless such withholding, listing, registration, qualification,
consent, or approval shall have been effected or obtained without any conditions
not acceptable to the Company.
 
Nontransferability of Options.  Unless the relevant Option Agreement with
respect to a Non-Incentive Stock Option expressly provides greater or lesser
rights to the Participant or the relevant Option Agreement with respect to an
Incentive Stock Option expressly provides lesser rights to the Participant, no
Option shall be transferable by a Participant other than by will or the laws of
descent and distribution or, in the case of a Non-Incentive Stock Option, a
qualified domestic relations order; provided, however, that the Board of
Directors or the Committee, as applicable, in its discretion, may allow for
transferability of non-qualified stock options by the Participant.  Following
any such transfer, any such options shall continue to be subject to the same
terms and conditions as were applicable immediately prior to transfer.
 
No Fractional Shares.  The Company shall not in any case be required to sell,
issue, or deliver a fractional Share with respect to any Option.  In lieu of the
sale, issuance, or delivery of any fractional Share, the Company shall pay to
the Participant an amount in cash equal to the same fraction (as the fractional
Share) of the Fair Market Value of a Share determined as of the date such Option
was exercised.
 
Delivery of Certificates of Stock.  The Company shall promptly issue and deliver
a certificate representing the number of Shares as to which an Option has been
duly exercised.  The value of the Shares issuable or deliverable upon exercise
of an Option shall not bear any interest owing to the passage of time, except as
may be otherwise provided in an Option Agreement or approved in writing by the
Committee.
 
 
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Legends.  Certificates for Shares issued or delivered upon exercise of an
Option, when delivered, may bear such legends or statements as the Committee or
the Company determines to be appropriate or advisable.
 
Restrictions on Transfer of Shares; Rights to Acquire from Participant.  Each
Option Agreement may provide for (a) restrictions on the transferability of
Shares acquired pursuant to an Option or otherwise and (b) options and rights of
first refusal with respect to any or all of such Shares in favor of the Company
and/or any or all of its shareholders that, in each instance, the Committee in
its sole and absolute discretion may deem proper or advisable.  Unless otherwise
provided in an Option Agreement, the provisions of the Shareholders’ Agreement
in effect at the date of exercise of an Option are fully applicable to all
Shares issued pursuant to that Option.  To the extent that Participant (or other
Person exercising the Option) has not already done so, the Participant (or other
Person exercising the Option) will be deemed to have executed a counterpart
thereof as of the date of exercise.  The Committee may require, as a condition
to the exercise of an Option, the Participant and his or her spouse (or other
Person exercising the Option) to execute and deliver an agreement confirming the
existence and enforceability of any such restrictions on the transferability of
the Shares to be acquired upon exercise of such Option and otherwise evidencing
their express agreement to be bound thereby.  The failure to obtain any such
confirmation and agreement shall not have any effect on the existence or
enforceability of the restrictions on transferability applicable to such Shares.
 
No Rights as Shareholder.  The holder of an Option shall not have any of the
rights of a shareholder of the Company with respect to the Shares covered by the
Option unless and until, and except to the extent that, one or more certificates
for such Shares shall have been delivered to such holder or such holder has been
determined to be a shareholder of record by the Company or its transfer agent
upon due exercise of the Option.
 
ARTICLE 7 
TERMINATION OF OPTIONS
 
Term of Options.  Unless the relevant Option Agreement expressly provides a
different term, the term of each Option shall be from the Date of Grant until
the date that is five years after such Date of Grant; provided, however, that no
Option Agreement relating to an Incentive Stock Option shall permit such
Incentive Stock Option to be exercisable later than ten years (five years in the
case of a 10% Holder) from the Date of Grant.
 
ARTICLE 7.1  Termination Before Option Becomes Exercisable.
 
(a) Unless the relevant Option Agreement with respect to a Non-Incentive Stock
Option expressly provides greater or lesser rights to the Employee-Participant
or the relevant Option Agreement with respect to an Incentive Stock Option
expressly provides lesser rights to the Employee-Participant, if an
Employee-Participant ceases to be an employee of an Eligible Employer for any
reason whatsoever before the date that an Option shall first have become
exercisable by the Employee-Participant and such Employee-Participant is not
then an employee of any other Eligible Employer, the Option and all rights of
the Employee-Participant to exercise the Option shall terminate, lapse, and be
forfeited at the time of such termination of employment.
 
 
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(b) Unless the relevant Option Agreement with respect to a Non-Incentive Stock
Option expressly provides greater or lesser rights to the Participant (other
than an Employee-Participant) or the relevant Option Agreement with respect to
an Incentive Stock Option expressly provides lesser rights to the Participant
(other than an Employee-Participant), if the Participant ceases to serve an
Eligible Employer in the capacity in which the Participant was serving at the
time the Option was granted for any reason whatsoever before the date an Option
shall first have become exercisable by the Participant and such Participant is
not then serving any other Eligible Employer, the Option and all rights of the
Participant to exercise the Option shall terminate, lapse, and be forfeited at
the time the Participant ceases to so serve the Eligible Employer.
 
ARTICLE 7.2  Discharge or Resignation.
 
(a) Unless the relevant Option Agreement with respect to a Non-Incentive Stock
Option expressly provides greater or lesser rights to the Employee-Participant
or the relevant Option Agreement with respect to an Incentive Stock Option
expressly provides lesser rights to the Employee-Participant, if an
Employee-Participant ceases to be an employee of an Eligible Employer for any
reason other than death or Disability and such Employee-Participant is not then
an employee of any other Eligible Employer, the Employee-Participant shall have
the right to exercise an Option, but only to the extent exercisable on the date
of such cessation of employment, at any time within three months after such
cessation of employment; provided, however, that if the Employee-Participant
shall die within three months after such date of cessation of employment without
having exercised the Option, the personal representatives, heirs, legatees, or
distributees of the Employee-Participant, as appropriate, shall have the right,
up to one year from such date of cessation of employment (or such lesser period
as is contemplated by Section 7.6 or 7.7, if applicable), to exercise any such
Option to the extent that the Option was exercisable prior to the
Employee-Participant’s death and had not been so exercised.  The Option and all
rights of the Employee-Participant to exercise the Option shall terminate,
lapse, and be forfeited on the date of such cessation of employment to the
extent the Option is not exercisable on such date.
 
(b) Unless the relevant Option Agreement with respect to a Non-Incentive Stock
Option expressly provides greater or lesser rights to the Participant (other
than an Employee-Participant) or the relevant Option Agreement with respect to
an Incentive Stock Option expressly provides lesser rights to the Participant
(other than an Employee-Participant), if the Participant ceases to serve an
Eligible Employer in the capacity in which the Participant was serving at the
time the Option was granted for any reason other than death and such Participant
is not then serving any other Eligible Employer, the Participant shall have the
right to exercise an Option, but only to the extent exercisable on the date of
such cessation, at any time within three months after such cessation; provided,
however, that if the Participant shall die within three months after such date
of cessation without having exercised the Option, the personal representatives,
heirs, legatees, or distributees of the Participant, as appropriate, shall have
the right, up to one year from such date of cessation (or such lesser period as
is contemplated by Section 7.6 or 7.7, if applicable), to exercise any such
Option to the extent that the Option was exercisable prior to the Participant’s
death and had not been so exercised.  The Option and all rights of the
Participant to exercise the Option shall terminate, lapse, and be forfeited on
the date of such cessation to the extent the Option is not exercisable on such
date.
 
 
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Death.  Unless the relevant Option Agreement with respect to a Non-Incentive
Stock Option expressly provides greater or lesser rights to the Participant or
the relevant Option Agreement with respect to an Incentive Stock Option
expressly provides lesser rights to the Participant, upon the death of a
Participant, the personal representatives, heirs, legatees, or distributees of
the Participant, as appropriate, shall have the right up to one year from the
date of the Participant’s death (or such lesser period as is contemplated by
Section 7.6 or 7.7, if applicable) to exercise any Option, but only to the
extent that the Option was exercisable at the date of the Participant’s death
and had not been so exercised.  The Option and all rights of the Participant to
exercise the Option shall terminate, lapse, and be forfeited on the date of such
death to the extent the Option is not exercisable on such date.
 
Disability.  Unless the relevant Option Agreement with respect to a
Non-Incentive Stock Option expressly provides greater or lesser rights to the
Employee-Participant or the relevant Option Agreement with respect to an
Incentive Stock Option expressly provides lesser rights to the
Employee-Participant, if an Employee-Participant ceases to be an employee of the
Eligible Employers due to such Employee-Participant’s Disability, as determined
solely and exclusively by the Committee, the Employee-Participant shall have the
right to exercise an Option, but only to the extent exercisable on the date of
termination of employment, at any time within one year after such termination of
employment (or such lesser period as is contemplated by Section 7.6 or 7.7, if
applicable).  The Option and all rights of the Participant to exercise the
Option shall terminate, lapse, and be forfeited on the date of such termination
of employment to the extent the Option is not exercisable on such date.
 
Limitations on Exercise.  Despite the provisions of Sections 7.4 and 7.5, no
Incentive Stock Option shall be exercisable under any condition after the
expiration of ten years (five years in the case of a 10% Holder) from the Date
of Grant.  In addition, the provisions of Sections 7.4 and 7.5, shall be subject
to the provisions of Sections 9.6 and 9.7.
 
Forfeiture.  Each Option Agreement may contain or otherwise provide for
conditions giving rise to the forfeiture of the Shares acquired pursuant to an
Option or otherwise.  The conditions giving rise to forfeiture may include, but
need not be limited to, the requirement that the Participant render substantial
services to the Company or its Parents or Subsidiaries for a specified period of
time.
 
 
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ARTICLE 8 
CERTAIN TAX MATTERS
 
Withholding.  The amount, as determined by the Committee, of any federal, state,
or local tax required to be withheld by the Company (or Subsidiary that is the
employer of the Participant) due to the exercise of a Non-Incentive Stock Option
shall be satisfied (a) by payment by the Participant to the Company (or
Subsidiary that is the employer of the Participant) of the amount of such
withholding obligation in cash, (b) through the retention by the Company of a
number of Shares out of the Shares being purchased through the exercise of the
Option having, at the date of withholding, a Fair Market Value equal to the
amount of the withholding obligation, (c) through delivery by the Participant of
Shares that have Fair Market Value at the date of withholding equal to the
amount of the withholding, or (d) any combination of the foregoing.  The
Committee shall determine the time and must consent to the manner in which a
Participant shall satisfy a withholding obligation.  The cash payment or cash
equal to the Fair Market Value of the Shares so withheld, as the case may be,
shall be remitted by the Company (or Subsidiary that is the employer of the
Participant) to the appropriate taxing authorities.
 
Disqualifying Disposition.  A Participant who makes a disqualifying disposition
(within the meaning of Section 422 of the Code) of Shares acquired through the
exercise of an Incentive Stock Option shall notify the Company of such
disposition and the amount realized upon such disposition.  The Company shall
have the right to require payment from the Participant to cover any federal,
state, or local tax required to be withheld by the Company in the event of the
disqualifying disposition of such Shares.  If a Participant fails to give the
Company notice of the disqualifying disposition and/or fails to make a payment
of the applicable withholding taxes and the Company incurs any penalties or
becomes liable for any interest under the Code for failure to withhold on wages,
the Participant shall immediately reimburse the Company for the amount of such
penalties and interest and shall pay the Company reasonable attorneys’ fees if
the Company resorts to legal action to enforce its rights under this sentence.
 
ARTICLE 9 
MISCELLANEOUS
 
Effective Date.  The Plan shall be effective as of September 1, 2012 provided,
however, that if the Plan is not approved by the holders of a majority of the
outstanding shares of voting stock of the Company prior to November 30, 2012,
all Incentive Stock Options granted under the Plan shall automatically become
Non-Incentive Stock Options.
 
Termination of Plan.  The Board or the Committee may terminate the Plan at any
time.  However, termination of the Plan shall not affect any Options previously
granted hereunder; such Options shall remain in effect until they have been
terminated or exercised, all in accordance with their terms.
 
Furnish Information.  Each Participant shall furnish to the Company all
information requested by the Company to enable it to comply with any reporting
or other requirement imposed upon the Company by or under any applicable statute
or regulation.
 
 
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Remedies.  The Company shall be entitled to recover from a Participant
reasonable attorneys’ fees incurred in connection with the enforcement of the
terms and provisions of the Plan and any Option Agreement whether by an action
to enforce specific performance or for damages for its breach or otherwise.
 
Information Confidential.  As partial consideration for the granting of each
Option hereunder, the Participant agrees with the Company to keep confidential
all information and knowledge that the Participant has relating to the manner
and amount of the Participant’s participation in the Plan; provided, however,
that such information may be disclosed as required by law and may be given in
confidence to the Participant’s spouse, tax and financial advisors, or to a
financial institution to the extent that such information is necessary to secure
a loan.  In the event any breach of this promise comes to the attention of the
Committee, it shall take into consideration that breach in determining whether
to recommend the grant of any future Option to that Person as a factor
militating against the advisability of granting any such future Option to that
Person.
 
Changes in Capital Structure.  If there is any change in the capital structure
of the Company through a Reorganization or otherwise, or if there shall be any
dividend on the Shares, payable in Shares, or if there shall be a stock split or
combination of Shares, the maximum aggregate number of Shares with respect to
which Options may be exercised hereunder and the number and the exercise price
of the Shares with respect to which an Option has been granted hereunder shall
be proportionately adjusted by the Committee as it deems equitable, in its
absolute discretion, to prevent dilution or enlargement of the rights of
Participants.  The issuance or delivery of stock for consideration shall not be
considered a change in the Company’s capital structure.  No adjustment provided
for in this Section shall require the issuance or delivery of any fractional
Share.  The provisions of this Section shall not override the provisions of
Section 9.7.
 
Dissolution, Liquidation, or Reorganization.  In the event of the dissolution or
liquidation of the Company, the Committee in its sole discretion, may (a)
declare any or all outstanding Options to be immediately exercisable, (b) pay
cash to any or all Participants in exchange for the cancellation of their
Options at a price determined by the Committee to be the fair value thereof, or
(c) permit the Participant to elect the manner in which the Option shall be
treated upon the liquidation or dissolution of the Company.  In the event of a
Reorganization of the Company, the Committee in its sole discretion, may (a)
declare any or all outstanding Options to be immediately exercisable, (b) pay
cash to any or all Participants in exchange for the cancellation of their
Options at a price determined by the Committee to be the fair value thereof, (c)
grant new Options, (d) substitute new Options for any or all Options awarded
hereunder, (e) permit any or all of the Options to continue in accordance with
their terms but with respect to the securities that would be issued in respect
of the Shares subject to such Options in connection with such Reorganization,
(f) make other adjustments to the Plan or any or all Options, or (g) permit the
Participant to elect the manner in which the Option shall be treated upon the
Reorganization of the Company.
 
Adjustments for Pooling of Interests Accounting.  Notwithstanding any other
provision of the Plan or any Option Agreement, if the Company enters into a
transaction that is intended to be accounted for using the pooling of interests
method of accounting, but it is determined by the Board that any Option or any
aspect thereof could reasonably be expected to preclude such treatment, then the
Board may modify (to the minimum extent required) or revoke (if necessary) the
Option or any of the provisions thereof to the extent that the Board determines
that such modification or revocation is necessary to enable the transaction to
be subject to the pooling of interests method of accounting.
 
 
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Amendment.  The Board may, by resolution, amend the Plan at any time; provided,
however, that, subject to the provisions of Section 9.6, 9.7, and 9.8 the Board
may not, without approval by the holders of a majority of the outstanding
Shares, (a) increase the Maximum Number, (b) reduce the exercise price with
respect to an Option granted hereunder, contrary to the provisions of the Plan
as hereinabove set forth, (c) change the class of employees eligible to
participate in the Plan, or (d) otherwise materially increase the benefits
accruing to Participants under the Plan or materially modify the requirements
with respect to eligibility for participation in the Plan.  The Board may not,
without the consent of the holder of an Option, alter or impair any Option
previously granted under the Plan except as authorized herein.
 
Automatic Amendment for Requirements of and Changes in Code.  The Plan, to the
extent it relates to Incentive Stock Options, and each Option Agreement that
relates to Incentive Stock Options shall automatically be amended to contain any
and all of the restrictions and limitations required, by Section 422 of the Code
and the regulations promulgated thereunder, to be contained in the Plan and/or
such Option Agreement, as appropriate.  The Plan and each Option Agreement that
relates to Incentive Stock Options shall automatically be amended to eliminate
any and all of the restrictions and limitations set forth in the Plan or any
Option Agreement with respect to Incentive Stock Options if and to the extent
that Section 422 of the Code and the regulations promulgated thereunder do not
require such restrictions and limitations and either permit or do not prohibit
such automatic amendments.
 
Nonguarantee of Employment.  Nothing in the Plan shall confer upon a Participant
any right to continue in the employ of, or to continue to perform services for,
any or all Eligible Employers or interfere in any way with the right of any or
all Eligible Employers to terminate the Participant’s employment or other
relationship with any or all Eligible Employers at any time.
 
Severability.  If any provision of the Plan is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term hereof,
such provision shall be fully severable and the Plan shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of the Plan; the remaining provisions of the Plan shall remain
in full force and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance from the Plan.  Furthermore, in lieu
of each such illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of the Plan a provision as similar in terms to such
illegal, invalid, or unenforceable provision as may be possible and be legal,
valid, and enforceable.  With respect to Incentive Stock Options, if the Plan
does not contain any provision required to be included herein under Section 422
of the Code, that provision shall be deemed to be incorporated herein with the
same force and effect as if that provision had been set out at length herein;
provided, however, that, to the extent any Option that is intended to qualify as
an Incentive Stock Option cannot so qualify, that Option (to that extent) shall
be deemed a Non-Incentive Stock Option for all purposes of the Plan.
 
 
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Rule 16b-3.  With respect to Participants subject to Section 16 of the Exchange
Act, transactions under the Plan are intended to comply with all applicable
conditions of Rule 16b-3 promulgated thereunder, and with respect to such
Participants all transactions shall be subject to such conditions regardless of
whether they are expressly set forth in the Plan or any Option Agreement.  To
the extent any provision of the Plan fails to so comply, the Plan shall
automatically be amended to contain any and all of the restrictions and
limitations required by Rule 16b-3.  To the extent any action by the Committee
fails to so comply, such action shall be deemed null and void to the extent
permitted by law and deemed advisable by the Committee.
 
Expenses.  Any expenses of administering the Plan shall be borne by the Eligible
Employers.
 
Construction.  Words used in the masculine shall apply to the feminine where
applicable, and wherever the context of the Plan dictates, the plural shall be
read as the singular and the singular as the plural.  The section headings
contained in the Plan are for reference purposes only and shall not in any way
affect the meaning or interpretation of the Plan.
 
Notice.  All notices, requests, demands, and other communications hereunder
shall be in writing and shall be personally delivered, delivered by facsimile or
courier service, or mailed, certified with first class postage prepaid to the
address specified by the person who is to receive the same in the relevant
Option Agreement.
 
Unless otherwise provided in an Option Agreement, each such notice, request,
demand, or other communication hereunder shall be deemed to have been given
(whether actually received or not) on the date of actual delivery thereof, if
personally delivered or delivered by facsimile transmission (if receipt is
confirmed at the time of such transmission by telephone or
facsimile-machine-generated confirmation), or on the third day following the
date of mailing, if mailed in accordance with this Section, or on the day
specified for delivery to the courier service (if such day is one on which the
courier service will give normal assurances that such specified delivery will be
made).  Unless otherwise provided in an Option Agreement, any notice, request,
demand, or other communication given, otherwise than in accordance with this
Section shall be deemed to have been given on the date actually
received.  Unless otherwise provided in an Option Agreement, any party may
change its address for purposes of this Section by giving written notice of such
change to all other persons who may be required or permitted to give any notice,
request, demand, or other communication hereunder in the manner hereinabove
provided.  Any Person entitled to any notice, request, demand, or other
communication hereunder may waive the notice, request, demand, or other
communication.
 
Calculation of Time.  In determining the time within which an event or action is
to take place for purposes of the Plan, no fraction of a day shall be
considered, and any act, the performance of which would fall on a day that is
not a Business Day, may be performed on the following Business Day.
 
Successors.  The Plan shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns and on the Participants and their
respective heirs, executors, administrators, and legal representatives to the
extent set forth in the Plan.
 
 
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[THIS SPACE LEFT BLANK INTENTIONALLY]
 

 
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IN WITNESS WHEREOF, the Company has executed the Plan on September 1, 2012, to
be effective as set forth in Section 9.1 above.
 

 
By: /s / Michael J. Borkowski 
     
Name: Michael J. Borkowski
     
Title: Chief Executive Officer/Director

 
 
ATTEST:
 

 
________________________________
                           Secretary
 

 
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EXHIBIT “A”

 
CURRENT FORM OF SHAREHOLDERS’ AGREEMENT

 
STOCK OPTION AGREEMENT
 
This Stock Option Agreement (the “Agreement”) is made and entered into by and
between Pristine Solutions, Inc., (the “Company”), and _________ (the
“Participant”), as of the effective date of this Agreement specified on Schedule
I hereof (the “Date of Grant”), pursuant to the Pristine Solutions, Inc. 2012
Stock Option Plan adopted effective September 1, 2012 (as the same may have been
or hereafter be amended from time to time, the “Plan”).  Terms used herein with
their initial letters capitalized that are defined in the Plan shall have the
meaning given them in the Plan unless otherwise defined herein or the context
hereof otherwise requires.
 
RECITALS:
 
A. The Company has adopted the Plan to strengthen the ability of the Company to
encourage ownership of the Company by certain employees of the Company and its
Subsidiaries, to provide additional incentive for them to remain in the employ
of the Company and its Subsidiaries, and to promote the growth and success of
the Company and its Subsidiaries.
 
B. The Committee that administers the Plan believes that the granting of the
stock option herein described to Participant is consistent with the stated
purposes for which the Plan was adopted.
 
NOW, THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and for other good and valuable consideration, the Company
and Participant agree as follows:
 
AGREEMENTS:
 
1. Plan Controls.  The terms of this Agreement are governed by the terms of the
Plan.  Participant hereby acknowledges receipt of a copy of the Plan, as amended
through the date hereof.  The Company hereby agrees to furnish to Participant a
copy of the Plan, as amended through the date of request therefor, without
charge, on request to the Company at the address to which notices are to be sent
to the Company.  In the case of any inconsistency between the terms of this
Agreement and the terms of the Plan, the terms of the Plan shall govern.
 
2. Grant of Option.  The Company hereby grants to Participant the right and
option (the “Option”) to purchase an aggregate number of shares set forth on
Schedule I hereof beside the caption “Number of Optioned Shares” (such number
being subject to adjustment as provided in Section 9.6 of the Plan) of the
Common Stock of the Company (the “Optioned Shares”) on the terms and conditions
herein set forth.  If designated on Schedule I hereof as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option as
defined in Section 422 of the Code, and this Agreement shall be interpreted
accordingly.  By execution of this Agreement, the Participant accepts the grant
of the Option.
 
 
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3. Exercise Price.  The price at which Participant shall be entitled to purchase
the Optioned Shares shall be the dollar amount per share set forth on Schedule I
hereof beside the caption “Exercise Price” (such exercise price being subject to
adjustment as provided in Section 9.6 of the Plan).  The exercise price shall be
paid with (a) cash (including check, bank draft, or money order); (b) if the use
of shares of Common Stock is permitted according to Schedule I hereof or
otherwise permitted by the Committee in writing, shares of Common Stock owned by
Participant; or (c) any combination of the foregoing.
 
4. Option Period.  The Option hereby granted shall be and remain in force and
effect during the “Option Period.” The Option Period begins on the Date of Grant
and terminates on the date that is ten years after the Date of Grant (or, if a
different date is shown on Schedule I hereof beside the caption “Termination
Date”, such date); subject, however to earlier termination as provided by the
provisions of Article VII of the Plan and this Agreement (it being understood
that this Agreement contains no express provision that would provide any of the
greater or lesser rights that Article VII of the Plan permits to be provided in
an Option Agreement except to the extent any variation therefrom is specifically
set forth in the language beside the caption “Greater or Lesser Article VII
Rights” on Schedule I hereof) (the date of any such termination being called
herein the “Expiration Date”).
 
5. Vesting Schedule.  The Option may be exercised, in whole or in part, from and
after the following dates and prior to the Expiration Date.  Except only as
specifically provided elsewhere herein or in the Plan, this Option shall be
exercisable in the following cumulative installments:
 
Up to ____________ of the Optioned Shares at any time after the first ninety
days of the Date of Grant;
 
Up to an additional ___________ of the Optioned Shares on or after the second
ninety days of the Date of Grant;
 
Up to an additional ____________ of the Optioned Shares on or after the third
ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the fourth
ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the fifth
ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the sixth
ninety days of the Date of Grant.
 
 
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Up to ____________ of the Optioned Shares at any time after the seventh ninety
days of the Date of Grant;
 
Up to an additional ___________ of the Optioned Shares on or after the eighth
ninety days of the Date of Grant;
 
Up to an additional ____________ of the Optioned Shares on or after the ninth
ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the tenth
ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the eleventh
ninety days of the Date of Grant; and
 
Up to an additional ____________ of the Optioned Shares on or after the twelfth
ninety days of the Date of Grant.
 
6. Nontransferability of Options.  Transfers of the Option are restricted as set
forth in the Plan except to the extent, if any, transfers are expressly
permitted in the language appearing beside the caption “Expanded Rights to
Transfer Option” on Schedule I hereof.  The Participant agrees to comply with
such restrictions.
 
7. Nontransferability of, and Right to Acquire, Shares.  Except to the extent,
if any, the language appearing beside the caption “Modifications to
Transfer/Repurchase Provisions” on Schedule I hereof modifies the provisions
thereof, the Stock Transfer/Repurchase Provisions, which are attached to the
Plan as Exhibit A, govern transfers of the Shares acquired upon exercise of the
Option and grant certain Persons the right to buy such Shares under certain
circumstances.  The Participant agrees to comply with the Stock
Transfer/Repurchase Provisions (if and as modified).
 
8. Information Confidential.  As partial consideration for the granting of the
Option, the Participant agrees with the Company to keep confidential all
information and knowledge that the Participant has relating to the manner and
amount of the Participant’s participation in the Plan; provided, however, that
such information may be disclosed as required by law and may be given in
confidence to the Participant’s spouse, the Participant’s tax and financial
advisors, or financial institutions to the extent that such information is
necessary to secure a loan.
 
9. Administration.  This Agreement is subject to the terms and conditions of the
Plan.  The Plan will be administered by the Committee in accordance with its
terms.  The Committee has sole and complete discretion with respect to all
matters reserved to it by the Plan and decisions of the Committee with respect
to the Plan and to this Agreement shall be final and binding upon Participant
and the Company.  In the event of any conflict between the terms and conditions
of this Agreement and the Plan, the provisions of the Plan shall control.
 
 
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10. Continuation of Employment.  This Agreement shall not be construed to confer
upon Participant any right to continue in the employ of the Company or any of
its Subsidiaries and shall not limit the right of the Company or any of its
Subsidiaries, in its sole discretion, to terminate the employment of Participant
at any time.
 
11. Notice.  All notices, requests, demands, and other communications hereunder
shall be in writing and shall be personally delivered, delivered by facsimile or
courier service, or mailed, certified with first class postage prepaid to the
address specified by the person who is to receive the same.
 
Each such notice, request, demand, or other communication hereunder shall be
deemed to have been given (whether actually received or not) on the date of
actual delivery thereof, if personally delivered or delivered by facsimile
transmission (if receipt is confirmed at the time of such transmission by
telephone or facsimile-machine-generated confirmation), or on the third day
following the date of mailing, if mailed in accordance with this Paragraph, or
on the day specified for delivery to the courier service (if such day is one on
which the courier service will give normal assurances that such specified
delivery will be made).  Any notice, request, demand, or other communication
given otherwise than in accordance with this Paragraph shall be deemed to have
been given on the date actually received.  Either party to this Agreement may
change its address for purposes of this Paragraph by giving written notice of
such change to the other party in the manner herein above provided.  Any person
entitled to any notice, request, demand, or other communication hereunder may
waive the notice, request, demand, or other communication.  Until changed in
accordance herewith, the Company and Participant specify their respective
addresses as those set forth below their signatures at the end of this
Agreement.
 
12. Paragraph Headings.  The Paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
 
13. Governing Law and Venue.  THIS AGREEMENT SHALL AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEVADA WITHOUT GIVING EFFECT TO ANY CHOICE OR
CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEVADA OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE  OF NEVADA. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE
PERSONAL JURISDICTION OF THE COURTS LOCATED IN THE STATE OF NEVADA AND AGREES
THAT ANY LITIGATION BETWEEN THE PARTIES WILL BE FILED IN COURTS LOCATED IN RENO,
NEVADA.
 
 
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14. Arbitration.  By execution hereof, the parties hereto expressly agree that
upon the request of any party, whether made before or after the institution of
any legal proceeding, any action, dispute, claim or controversy of any kind,
whether in contract or in tort, statutory or common law, legal or equitable,
arising between the parties in any way arising out of any of the provisions
contained in this Agreement shall be resolved by binding arbitration
administered by the American Arbitration Association (the “AAA”) and in Reno,
Nevada.  Such arbitration shall be conducted in accordance with the Commercial
Arbitration Rules of the AAA and, to the maximum extent applicable, the Federal
Arbitration Act (Title 9 of the United States Code) except as otherwise
specified herein.  Judgment upon the award rendered by the arbitrator may be
entered in any court having competent jurisdiction.  The arbitrator shall
resolve all disputes in accordance with the applicable substantive law.  A
single arbitrator shall be chosen and shall decide the dispute, unless the
amount sought in the dispute exceeds $100,000, in which case a panel of three
arbitrators shall decide the dispute.  In all arbitration proceedings in which
the amount of any award exceeds $100,000, in the aggregate, the arbitrator(s)
shall make specific, written findings of fact and conclusions of law.  In all
arbitration proceedings in which the amount of any award exceeds $100,000, in
the aggregate, the parties shall have, in addition to the limited statutory
right to seek a vacation or modification of an award pursuant to applicable law,
the right to vacation or modification of any award that is based, in whole or in
part, on an incorrect or erroneous ruling of law by appeal to an appropriate
court having jurisdiction; provided, however, that any such application for a
vacation or modification of such an award based on an incorrect ruling of law
must be filed in a court having jurisdiction over the dispute within 15 days
from the date the award is rendered.  The findings of fact of the arbitrator(s)
shall be binding on all parties and shall not be subject to further review
except as otherwise allowed by applicable law.  No provision of this Agreement
nor the exercise of any rights hereunder shall limit the right of any party, and
any party shall have the right during any dispute, to seek, use, and employ
ancillary or preliminary remedies, such as injunctive relief (including, without
limitation, specific performance), from a court having jurisdiction before,
during, or after the pendency of any arbitration.  The institution and
maintenance of any action for judicial relief or pursuit of provisional or
ancillary remedies shall not constitute a waiver of the right of any party to
submit any dispute to arbitration nor render inapplicable the compulsory
arbitration provisions hereof.
 
15. Attorney’s Fees.  If any action is brought to enforce or interpret the terms
of this Agreement (including through arbitration), the prevailing party shall be
entitled to reasonable attorneys’ fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
 
16. Counterparts.  This Agreement may be executed in any number of counterparts
and shall be effective when each party hereto has executed at least one
counterpart, with the same effect as if all signing parties had signed the same
document.  All counterparts will be construed together and evidence only one
agreement, which, notwithstanding the actual date of execution of any
counterpart, shall be deemed to be dated the day and year first written
above.  In making proof of this Agreement, it shall not be necessary to account
for a counterpart executed by any party other than the party against whom
enforcement is sought or to account for more than one counterpart executed by
the party against whom enforcement is sought.
 
17. Execution by Facsimile.  The manual signature of any party hereto that is
transmitted to any other party by facsimile shall be deemed for all purposes to
be an original signature.

 
[THIS SPACE LEFT BLANK INTENTIONALLY]
 

 
 
B-5

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Executed on the date or dates indicated below, to be effective as of September
1, 2012.

               By:
                                                                
         Name:
                                                                
         Title: 
                                                               
         Date:
 
         Address:
 
                           Participant:
 
               Name:
 
         Date:
 
         Address:
 

 

 
 
B-6

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SCHEDULE I

 
DATE OF GRANT:
 
September 1, 2012
TYPE OF OPTION:
Incentive Stock Option______
     
Nonqualified Stock Option_________
NUMBER OF OPTIONED SHARES:
     
EXERCISE PRICE:
$ 00.00
 
TERMINATION DATE:
Fifth Anniversary of Date of Grant (Maximum term of 10 years; 5 years in the
case of 10% shareholders)
 
PERMISSION TO PAY WITH SHARES:
________Granted                      Denied
 
EXPANDED RIGHTS TO TRANSFER OPTION:
 
________Granted                      Denied                      
GREATER OR LESSER ARTICLE VII RIGHTS:
None

 
I-1
 
 

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