Exhibit 10.4

LEGEND OIL AND GAS, LTD.

2011 STOCK INCENTIVE PLAN

(Adopted May 8, 2011, as amended February 7, 2012)

SECTION 1. PURPOSE

The purpose of the LEGEND OIL AND GAS, LTD. 2011 Stock Incentive Plan (the
“Plan”) is to enhance the long-term stockholder value of LEGEND OIL AND GAS,
LTD., a Colorado corporation (the “Company”), by offering opportunities to
selected Persons to participate in the Company’s growth and success, and to
encourage them to remain in the service of the Company or a Related Company (as
defined in Section 2) and to acquire and maintain stock ownership in the
Company.

SECTION 2. DEFINITIONS

In the Plan:

“Award” means any Option or Stock Award.

“Board” means the Board of Directors of the Company.

“Cause,” unless otherwise defined in the instrument evidencing the Award or in
an employment or services agreement between the Company or a Related Company and
a Participant, means dishonesty, fraud, misconduct, unauthorized use or
disclosure of confidential information or trade secrets or violation of
noncompetition and confidentiality agreements, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Plan Administrator, and its determination shall be conclusive and binding.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Committee” shall mean a committee, or subcommittee, consisting of two or more
directors who shall be appointed by and serve at the pleasure of the Board. To
the extent necessary for compliance with Rule 16b-3, or any successor provision,
each of the members of the Committee shall be a “non-employee director.” Solely
for purposes of this Section 1(e), “non-employee director” shall have the same
meaning as set forth in Rule 16b-3 under the Exchange Act, or any successor
provision, as then in effect.

“Common Stock” or “Stock” means the common stock, $0.001 par value per share, of
the Company.

“Company” means LEGEND OIL AND GAS, LTD., a Colorado corporation.

“Company Transaction,” unless otherwise defined in the instrument evidencing the
Award or in a written employment or services agreement between a Participant and
the Company or a Related Company and a Participant, means consummation of
either:

(a) a merger or consolidation of the Company with or into any other entity; or

(b) a sale, lease, exchange or other transfer in one transaction or a series of
related transactions undertaken with a common purpose of all or substantially
all the Company’s then outstanding securities or all or substantially all the
Company’s assets;

provided, however, that a Company Transaction shall not include a Related Party
Transaction.

“Disability,” unless otherwise defined by the Plan Administrator, means a mental
or physical impairment of a Participant that is expected to result in death or
that has lasted or is expected to last for a continuous period of twelve
(12) months or more and that causes a Participant to be unable, in the opinion
of the Company, to perform his or her duties for the Company or a Related
Company and to be engaged in any substantial gainful activity.

“Early Retirement” means Termination of Service (as defined below) prior to
Retirement on terms and conditions approved by the Plan Administrator.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.

 

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“Fair Market Value” means the per share value of the Common Stock as established
in good faith by the Plan Administrator or, if the Common Stock is: (a) listed
on a national stock exchange (including any tier of The Nasdaq Stock Market, The
New York Stock Exchange or The American Stock Exchange), the closing sales price
for the Common Stock as reported by that market for regular session trading for
a single trading day; or (b) quoted on OTC Bulletin Board, OTC QX or by the Pink
OTC Markets Inc., the closing sales price reported by such service for a single
trading day. If there is no such reported price for the Common Stock for the
date in question, then such price on the last preceding date for which such
price exists shall be determinative of Fair Market Value.

“Grant Date” means the date on which the Plan Administrator completes the
corporate action relating to the grant of an Award or such later date specified
by the Plan Administrator, and on which all conditions precedent to the grant
have been satisfied; provided, however, that conditions to the exercisability or
vesting of Awards shall not defer the Grant Date.

“Incentive Stock Option” means an Option granted with the intention, as
reflected in the instrument evidencing the Option, that it qualify as an
“incentive stock option” as that term is defined in Section 422 of the Code.

“Nonqualified Stock Option” means an Option other than an Incentive Stock
Option.

“Option” means the right to purchase Common Stock granted under Section 7.

“Option Expiration Date” has the meaning set forth in Section 7.6.

“Option Term” has the meaning set forth in Section 7.3.

“Participant” means the Person to whom an Award is granted.

“Plan” means the LEGEND OIL AND GAS, LTD. 2011 Stock Incentive Plan.

“Plan Administrator” shall mean the Board, or one or more Committees appointed
by the Board, as the case may be.

“Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust,
incorporated, organization, governmental or regulatory or other entity.

“Related Company” means any entity that, directly or indirectly, is in control
of, or is controlled by, or is under common control with the Company.

“Related Party Transaction” means (a) a merger or consolidation of the Company
in which the holders of the outstanding voting securities of the Company
immediately prior to the merger or consolidation hold at least a majority of the
outstanding voting securities of the Successor Company immediately after the
merger or consolidation; (b) a sale, lease, exchange or other transfer of the
Company’s assets to a majority-owned subsidiary company; (c) a transaction
undertaken for the principal purpose of restructuring the capital of the
Company, including but not limited to, reincorporating the Company in a
different jurisdiction or creating a holding company; or (d) a corporate
dissolution or liquidation.

“Retirement,” unless otherwise defined by the Plan Administrator from time to
time for purposes of the Plan, means Termination of Service on or after the date
the individual reaches “normal retirement age” as that term is defined in
Section 411(a)(8) of the Code.

“Securities Act” means the Securities Act of 1933, as amended.

“Stock Award” means an award of shares of Common Stock or units denominated in
Common Stock granted under Section 9, the rights of ownership of which may be
subject to restrictions prescribed by the Plan Administrator.

“Successor Company” means the surviving company, the successor company or its
parent, as applicable, in connection with a Company Transaction.

“Termination of Service” means a termination of employment or service
relationship with the Company or a Related Company for any reason, whether
voluntary or involuntary, including death, Disability, Early Retirement or
Retirement, as determined by the Administrator in its sole discretion. Any
question as to whether and when there has been a Termination of Service for the
purposes of an Award and the cause of such Termination of Service shall be
determined by the Plan Administrator and its determination shall be final.
Transfer of a Participant’s employment or service relationship between Related
Corporations, or between the Company and any Related Corporation, shall not be
considered a Termination of Service for purposes of an Award, but unless the
Plan Administrator determines otherwise, a Termination of Service shall be
deemed to occur if a Participant’s employment or service relationship is with an
entity that has ceased to be a Related Corporation.

 

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“Vesting Commencement Date” means the Grant Date or such other date selected by
the Plan Administrator as the date from which the Option begins to vest for
purposes of Section 7.4.

SECTION 3. ADMINISTRATION

 

3.1 Plan Administrator

The Plan shall be administered by the Plan Administrator. If and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the
Board shall consider in selecting the members of any Committee acting as Plan
Administrator, with respect to any members of such Committee(s) subject or
likely to become subject to Section 16 of the Exchange Act, the provisions
regarding (a) “outside directors” as contemplated by Section 162(m) of the Code
and (b) “nonemployee directors” as contemplated by Rule 16b-3 under the Exchange
Act. Notwithstanding the foregoing, the Board may delegate the responsibility
for administering the Plan with respect to designated classes of eligible
Persons to different Committees, subject to such limitations as the Board deems
appropriate. A Committee member shall serve at the pleasure of the Board for
such term as the Board may determine, subject to removal by the Board at any
time. To the extent consistent with applicable law, the Board may authorize one
or more senior executive officers of the Company to grant Awards to designated
classes of eligible Persons, within the limits specifically prescribed by the
Board.

 

3.2 Administration and Interpretation by Plan Administrator

Except for the terms and conditions explicitly set forth in this Plan, the Plan
Administrator shall have exclusive authority, in its discretion, to determine
all matters relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt and change rules and regulations of general application
for the Plan’s administration. The Plan Administrator’s interpretation of the
Plan and its rules and regulations, and all actions taken and determinations
made by the Plan Administrator pursuant to the Plan, shall be conclusive and
binding on all parties involved or affected. The Plan Administrator may delegate
ministerial duties to such of the Company’s officers as it so determines.

SECTION 4. STOCK SUBJECT TO THE PLAN

 

4.1 Authorized Number of Shares

Subject to adjustment from time to time as provided in Section 12.1, a maximum
of four million five hundred thousand (4,500,000) shares of Common Stock shall
be available for issuance under the Plan. Shares issued under the Plan shall be
drawn from authorized and unissued shares of Common Stock or shares of Common
Stock now held or subsequently acquired by the Company.

 

4.2 Reuse of Shares

Any shares of Common Stock that have been made subject to an Award that cease to
be subject to the Award (other than by reason of exercise or settlement of the
Award to the extent it is exercised for or settled in shares) shall again be
available for issuance in connection with future grants of Awards under the
Plan. In the event shares of Common Stock issued under the Plan are reacquired
by the Company pursuant to any forfeiture provision, right of repurchase or
right of first refusal, such shares shall again be available for the purposes of
the Plan; provided, however, that the maximum number of shares that may be
issued upon the exercise of Incentive Stock Options shall equal the share number
stated in Section 4.1, subject to adjustment from time to time as provided in
Section 12.1.

SECTION 5. ELIGIBILITY

An Award may be granted to eligible Persons, including any officer, director or
employee of the Company, or a Related Company, that the Plan Administrator from
time to time selects. If an Award is granted to any consultant, advisor or
independent contractor who provides services to the Company or any Related
Company, the services rendered must be bona fide services that (i) are not in
connection with the offer and/or sale of any of the Company’s securities in a
capital-raising transaction, and (ii) do not directly or indirectly promote or
maintain a market for any of the Company’s securities.

 

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SECTION 6. AWARDS

 

6.1 Form and Grant of Awards

The Plan Administrator shall have the authority, in its sole discretion, to
determine the type or types of Awards to be granted under the Plan. Awards may
be granted singly or in combination.

 

6.2 Settlement of Awards

The Company may settle Awards through the delivery of shares of Common Stock,
the granting of replacement Awards or any combination thereof as the Plan
Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents.

 

6.3 Acquired Company Awards

Notwithstanding anything in the Plan to the contrary, the Plan Administrator may
grant Awards under the Plan in substitution for awards issued under other plans,
or assume under the Plan awards issued under other plans, if the other plans are
or were plans of other acquired entities, or the parent of such acquired entity
(“Acquired Entities”) and the new Award is substituted, or the old award is
assumed, by reason of a merger, consolidation, acquisition of property or stock,
reorganization or liquidation (the “Acquisition Transaction”). In the event that
a written agreement pursuant to which the Acquisition Transaction is completed
is approved by the Board and said agreement sets forth the terms and conditions
of the substitution for or assumption of outstanding awards of the Acquired
Entity, said terms and conditions shall be deemed to be the action of the Plan
Administrator without any further action by the Plan Administrator, except as
may be required for compliance with Rule 16b-3 under the Exchange Act, and the
Persons holding such awards shall be deemed to be Participants.

SECTION 7. AWARDS OF OPTIONS

 

7.1 Grant of Options

The Plan Administrator shall have the authority, in its sole discretion, to
grant Options designated as Incentive Stock Options or as Nonqualified Stock
Options.

 

7.2 Option Exercise Price

The exercise price for shares purchased under an Option shall be as determined
by the Plan Administrator, but shall not be less than the minimum exercise price
required by Section 8.3 with respect to Incentive Stock Options.

 

7.3 Term of Options

Subject to earlier termination in accordance with the terms of the Plan and the
instrument evidencing the Option, the maximum term of an Option (the “Option
Term”) shall be as established for that Option by the Plan Administrator or, if
not so established, shall be ten (10) years from the Grant Date. For Incentive
Stock Options, the Option Term shall be as specified in Section 8.4.

 

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7.4 Exercise of Options

The Plan Administrator shall establish and set forth in each instrument that
evidences an Option the time at which, or the installments in which, the Option
shall vest and become exercisable, any of which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:

 

Period of Participant’s Continuous
Employment or Service With the Company
or Its Related Companies From the Vesting
Commencement Date

 

Portion of Total Option
That Is Vested and Exercisable

After 1 year

  25% Each additional one-month period of continuous employment or service
completed thereafter   1/36th of the remaining 75%

After 4 years

  100%

The Plan Administrator, in its sole discretion, may adjust the vesting schedule
of an Option held by a Participant who works less than “full time” as that term
is defined by the Plan Administrator or who takes a Company-approved leave of
absence.

To the extent an Option has vested and become exercisable, the Option may be
exercised in whole or, from time to time, in part by delivery to the Company of
a written stock option exercise agreement or notice, in a form and in accordance
with procedures established by the Plan Administrator, setting forth the number
of shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement, if any, and such
representations and agreements as may be required by the Plan Administrator,
accompanied by payment in full as described in Section 7.5. An Option may be
exercised only for whole shares and may not be exercised for less than a
reasonable number of shares at any one time, as determined by the Plan
Administrator.

 

7.5 Payment of Exercise Price

The exercise price for shares purchased under an Option shall be paid in full to
the Company by delivery of consideration equal to the product of the Option
exercise price and the number of shares purchased. Such consideration must be
paid before the Company will issue the shares being purchased and must be in a
form or a combination of forms acceptable to the Plan Administrator for that
purchase, which forms may include:

(a) cash;

(b) check;

(c) tendering (either actually or, if the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, by attestation) shares of Common
Stock already owned by a Participant for at least six (6) months (or any shorter
period necessary to avoid a charge to the Company’s earnings for financial
reporting purposes) that on the day prior to the exercise date have a Fair
Market Value equal to the aggregate exercise price of the shares being purchased
under the Option;

(d) if the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, delivery of a properly executed exercise notice, together with
irrevocable instructions to a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise, all in accordance with the regulations of the
Federal Reserve Board; or

(e) such other consideration as the Plan Administrator may permit.

In addition, to assist a Participant (including a Participant who is an officer
or a director of the Company) in acquiring shares of Common Stock pursuant to an
Award granted under the Plan, the Plan Administrator, in its sole discretion,
may authorize, either at the Grant Date or at any time before the acquisition of
Common Stock pursuant to the Award, (i) the payment by a Participant of the
purchase price of the Common Stock by a full-recourse promissory note or
(ii) the guarantee by the Company of a full-recourse loan obtained by a
Participant from a third party. Subject to the foregoing, the Plan Administrator
shall in its sole discretion specify the terms of any loans or loan guarantees,
including the interest rate and terms of and security for repayment.

 

7.6 Post-Termination Exercises

The Plan Administrator shall establish and set forth in each instrument that
evidences an Option whether the Option shall continue to be exercisable, and the
terms and conditions of such exercise, if a Participant ceases to be employed
by, or to provide services to, the Company or a Related Company, which
provisions may be waived or

 

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modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall be exercisable according to
the following terms and conditions, which may be waived or modified by the Plan
Administrator at any time:

(a) Any portion of an Option that is not vested and exercisable on the date of a
Participant’s Termination of Service shall expire on such date.

(b) Any portion of an Option that is vested and exercisable on the date of a
Participant’s Termination of Service shall expire on the earliest to occur of:

(i) if the Participant’s Termination of Service occurs for reasons other than
Cause, Retirement or Early Retirement, Disability or death, the date which is
three (3) months after such Termination of Service;

(ii) if the Participant’s Termination of Service occurs by reason of Retirement
or Early Retirement, Disability or death, the one-year anniversary of such
Termination of Service; and

(iii) the last day of the Option Term (the “Option Expiration Date”).

Notwithstanding the foregoing, if a Participant dies after his or her
Termination of Service but while an Option is otherwise exercisable, the portion
of the Option that is vested and exercisable on such Termination of Service
shall expire upon the earlier to occur of (y) the Option Expiration Date and
(z) the one-year anniversary of the date of death, unless the Plan Administrator
determines otherwise.

Also notwithstanding the foregoing, in case a Participant’s Termination of
Service occurs for Cause, all Options granted to a Participant shall
automatically expire upon first notification to the Participant of such
termination, unless the Plan Administrator determines otherwise. If a
Participant’s employment or service relationship with the Company is suspended
pending an investigation of whether a Participant shall be terminated for Cause,
all a Participant’s rights under any Option shall likewise be suspended during
the period of investigation. If any facts that would constitute termination for
Cause are discovered after a Participant’s Termination of Service, any Option
then held by a Participant may be immediately terminated by the Plan
Administrator, in its sole discretion.

(c) A Participant’s transfer of employment or service relationship between or
among the Company and any Related Company, or a change in status from an
employee to a consultant, advisor or independent contractor or a change in
status from a consultant, advisor or independent contractor to an employee,
shall not be considered a Termination of Service for purposes of this Section 7.

(d) The effect of a Company-approved leave of absence on the application of this
Section 7 shall be determined by the Plan Administrator, in its sole discretion.

SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS

Notwithstanding any other provisions of the Plan, and to the extent required by
Section 422 of the Code, Incentive Stock Options shall be subject to the
following additional terms and conditions:

 

8.1 Dollar Limitation

To the extent the aggregate Fair Market Value (determined as of the Grant Date)
of Common Stock with respect to which a Participant’s Incentive Stock Options
become exercisable for the first time during any calendar year (under the Plan
and all other stock option plans of the Company) exceeds $100,000, such portion
in excess of $100,000 shall be treated as a Nonqualified Stock Option. In the
event a Participant holds two or more such Options that become exercisable for
the first time in the same calendar year, such limitation shall be applied on
the basis of the order in which such Options are granted.

 

8.2 Eligible Employees

Individuals who are not employees of the Company or one of its parent companies
or subsidiary companies may not be granted Incentive Stock Options.

 

8.3 Exercise Price

The exercise price of an Incentive Stock Option shall be at least one hundred
percent (100%) of the Fair Market Value of the Common Stock on the Grant Date,
and in the case of an Incentive Stock Option granted to a Participant who owns
more than ten percent (10%) of the total combined voting power of all classes of
the stock of the

 

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Company or of its parent or subsidiary companies (a “Ten Percent Stockholder”),
shall not be less than one hundred and ten percent (110%) of the Fair Market
Value of the Common Stock on the Grant Date. The determination of more than ten
percent (10%) ownership shall be made in accordance with Section 422 of the
Code.

 

8.4 Option Term

Subject to earlier termination in accordance with the terms of the Plan and the
instrument evidencing the Option, the Option Term of an Incentive Stock Option
shall not exceed ten (10) years, and in the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, shall not exceed five (5) years.

 

8.5 Exercisability

An Option designated as an Incentive Stock Option shall cease to qualify for
favorable tax treatment as an Incentive Stock Option to the extent it is
exercised (if permitted by the terms of the Option):

(a) more than three (3) months after the date of a Participant’s Termination of
Service, if termination was for reasons other than death or disability;

(b) more than one (1) year after the date of a Participant’s Termination of
Service, if termination was by reason of disability; or

(c) after a Participant has been on leave of absence for more than ninety
(90) days, unless a Participant’s reemployment rights are guaranteed by statute
or contract.

 

8.6 Taxation of Incentive Stock Options

In order to obtain certain tax benefits afforded to Incentive Stock Options
under Section 422 of the Code, a Participant must hold the shares acquired upon
the exercise of an Incentive Stock Option for two (2) years after the Grant Date
and one (1) year after the date of exercise.

A Participant may be subject to the alternative minimum tax at the time of
exercise of an Incentive Stock Option. A Participant shall give the Company
prompt written notice of any disposition of shares acquired on the exercise of
an Incentive Stock Option prior to the expiration of such holding periods.

 

8.7 Promissory Notes

The amount of any promissory note delivered pursuant to Section 7.5 herein in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than the rate required
to avoid imputation of interest (taking into account any exceptions to the
imputed interest rules) for federal income tax purposes.

 

8.8 Code Definitions

For the purposes of this Section 8, “parent corporation,” “subsidiary
corporation” and “disability” shall have the meanings attributed to those terms
for purposes of Section 422 of the Code.

SECTION 9. STOCK AWARDS

 

9.1 Grant of Stock Awards

The Plan Administrator is authorized to make Awards of shares of Common Stock or
Awards denominated in units of Common Stock on such terms and conditions and
subject to such repurchase or forfeiture restrictions, if any (which may be
based on continuous service with the Company or the achievement of performance
goals related to profits, profit growth, profit-related return ratios, cash flow
or total stockholder return, where such goals may be stated in absolute terms or
relative to comparison companies), as the Plan Administrator shall determine, in
its sole discretion, which terms, conditions and restrictions shall be set forth
in the instrument evidencing the Award. The terms, conditions and restrictions
that the Plan Administrator shall have the power to determine shall include,
without limitation, the manner in which shares subject to Stock Awards are held
during the periods they are subject to restrictions and the circumstances under
which repurchase or forfeiture of the Stock Award shall occur by reason of a
Participant’s Termination of Service.

 

9.2 Issuance of Shares

Upon the satisfaction of any terms, conditions and restrictions prescribed in
respect to a Stock Award, or upon a Participant’s release from any terms,
conditions and restrictions of a Stock Award, as determined by the Plan

 

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Administrator, the Company shall release, as soon as practicable, to a
Participant or, in the case of a Participant’s death, to the personal
representative of a Participant’s estate or as the appropriate court directs,
the appropriate number of shares of Common Stock.

 

9.3 Waiver of Restrictions

Notwithstanding any other provisions of the Plan, the Plan Administrator may, in
its sole discretion, waive the repurchase or forfeiture period and any other
terms, conditions or restrictions on any Stock Award under such circumstances
and subject to such terms and conditions as the Plan Administrator shall deem
appropriate.

SECTION 10. WITHHOLDING

The Company may require a Participant to pay to the Company the amount of any
taxes that the Company is required by applicable federal, state, local or
foreign law to withhold with respect to the grant, vesting or exercise of an
Award. The Company shall not be required to grant or issue any securities under
the Plan until such obligations are satisfied.

The Plan Administrator may permit or require a Participant to satisfy all or
part of his or her tax withholding obligations by (a) paying cash to the
Company, (b) having the Company withhold from any cash amounts otherwise due or
to become due from the Company to a Participant, or (c) having the Company
withhold a number of shares of Common Stock that would otherwise be issued to a
Participant (or become vested, as applicable) having a value equal to the tax
withholding obligations (up to the employer’s minimum required tax withholding
rate), or (d) surrendering a number of shares of Common Stock a Participant
already owns having a value equal to the tax withholding obligations (up to the
employer’s minimum required tax withholding rate to the extent a Participant has
owned the surrendered shares for less than six (6) months if such a limitation
is necessary to avoid a charge to the Company for financial reporting purposes).

SECTION 11. TRANSFERABILITY

Neither an Award nor any interest therein may be assigned, pledged or
transferred by a Participant or made subject to attachment or similar
proceedings otherwise than by will or by the applicable laws of descent and
distribution, and, during a Participant’s lifetime, such Awards may be exercised
only by a Participant. Notwithstanding the foregoing, and to the extent
permitted by Section 422 of the Code, the Plan Administrator, in its sole
discretion, may permit a Participant to assign or transfer an Award or may
permit a Participant to designate a beneficiary who may exercise the Award or
receive payment under the Award after a Participant’s death; provided, however,
that an Award so assigned or transferred shall be subject to all the terms and
conditions of the Plan and those contained in the instrument evidencing the
Award.

SECTION 12. ADJUSTMENTS

 

12.1 Adjustment of Shares

In the event, at any time or from time to time, a stock dividend, stock split,
spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to stockholders other than a normal cash dividend,
or other change in the Company’s corporate or capital structure results in
(a) the outstanding shares of Common Stock, or any securities exchanged therefor
or received in their place, being exchanged for a different number or kind of
securities of the Company or of any other company or (b) new, different or
additional securities of the Company or of any other company being received by
the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities subject to the Plan and issuable as Incentive Stock Options
as set forth in Section 4 and (ii) the number and kind of securities that are
subject to any outstanding Award and the per share price of such securities,
without any change in the aggregate price to be paid therefor. The determination
by the Plan Administrator as to the terms of any of the foregoing adjustments
shall be conclusive and binding. Notwithstanding the foregoing, a dissolution or
liquidation of the Company or a Company Transaction shall not be governed by
this Section 12.1 but shall be governed by Sections 12.2 and 12.3, respectively.

 

12.2 Dissolution or Liquidation

To the extent not previously exercised or settled, and unless otherwise
determined by the Plan Administrator in its sole discretion, Options and Stock
Awards denominated in units shall terminate immediately prior to the dissolution
or liquidation of the Company. To the extent a forfeiture provision or
repurchase right applicable to an Award has not been waived by the Plan
Administrator, the Award shall be forfeited immediately prior to the
consummation of the dissolution or liquidation.

 

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12.3 Company Transaction

 

  12.3.1   Options

In the event of a Company Transaction, except as otherwise provided in the
instrument evidencing an Option or in a written employment or services agreement
between a Participant and the Company or a Related Company, the following shall
apply:

(a) Except as provided in subsection (b) below, each outstanding Option shall be
assumed or an equivalent option or right substituted by the Successor Company.

(b) If in the event of a Company Transaction the Successor Company refuses to
assume or substitute for an Option, then each such outstanding Option shall
become fully vested and exercisable with respect to one hundred percent
(100%) of the unvested portion of the Option. In such case, the Plan
Administrator shall notify a Participant in writing or electronically that one
hundred percent (100%) of the unvested portion of the Option specified above
shall be fully vested and exercisable for a specified time period. At the
expiration of the time period, the Option shall terminate, provided that the
Company Transaction is consummated.

(c) For the purposes of this Section 12.3, the Option shall be considered
assumed or substituted for if following the Company Transaction the option or
right confers the right to purchase or receive, for each share of Common Stock
subject to the Option immediately prior to the Company Transaction, the
consideration (whether stock, cash, or other securities or property) received in
the Company Transaction by holders of Common Stock for each share held on the
effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares); provided, however, that if such consideration received
in the Company Transaction is not solely common stock of the Successor Company,
the Plan Administrator may, with the consent of the Successor Company, provide
for the consideration to be received upon the exercise of the Option, for each
share of Common Stock subject thereto, to be solely common stock of the
Successor Company substantially equal in fair market value to the per share
consideration received by holders of Common Stock in the Company Transaction.
The determination of such substantial equality of value of consideration shall
be made by the Plan Administrator and its determination shall be conclusive and
binding.

(d) All Options shall terminate and cease to remain outstanding immediately
following the Company Transaction, except to the extent assumed by the Successor
Company.

 

  12.3.2   Stock Awards

In the event of a Company Transaction, except as otherwise provided in the
instrument evidencing the Award or in a written employment or services agreement
between a Participant and the Company or a Related Company, the vesting of
shares subject to Stock Awards shall accelerate, and the forfeiture provisions
to which such shares are subject shall lapse, if and to the same extent that the
vesting of outstanding Options accelerates in connection with the Company
Transaction. If unvested Options are to be assumed or substituted by a Successor
Company without acceleration upon the occurrence of a Company Transaction, the
repurchase or forfeiture provisions to which such Stock Awards are subject shall
continue with respect to shares of the Successor Company that may be issued in
exchange for such shares.

 

12.4  Further Adjustment of Awards

Subject to Sections 12.2 and 12.3, the Plan Administrator shall have the
discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation, dissolution or change of control of the Company, as
defined by the Plan Administrator, to take such further action as it determines
to be necessary or advisable with respect to Awards. Such authorized action may
include (but shall not be limited to) establishing, amending or waiving the
type, terms, conditions or duration of, or restrictions on, Awards so as to
provide for earlier, later, extended or additional time for exercise, lifting
restrictions and other modifications, and the Plan Administrator may take such
actions with respect to all Participants, to certain categories of Participants
or only to individual Participants. The Plan Administrator may take such action
before or after granting Awards to which the action relates and before or after
any public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation, dissolution or change of control that is the reason
for such action.

 

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12.5 Limitations

The grant of Awards shall in no way affect the Company’s right to adjust,
reclassify, reorganize or otherwise change its capital or business structure or
to merge, consolidate, dissolve, liquidate or sell or transfer all or any part
of its business or assets.

 

12.6 Fractional Shares

In the event of any adjustment in the number of shares covered by any Award,
each such Award shall cover only the number of full shares resulting from such
adjustment.

SECTION 13. [Intentionally Deleted]

SECTION 14. MARKET STANDOFF

In the event of an underwritten public offering by the Company of its equity
securities pursuant to an effective registration statement filed under the
Securities Act, including the Company’s initial public offering, no Person may
sell, make any short sale of, loan, hypothecate, pledge, grant any option for
the purchase of, or otherwise dispose of or transfer for value or otherwise
agree to engage in any of the foregoing transactions with respect to any shares
issued pursuant to an Award granted under the Plan without the prior written
consent of the Company or its underwriters. Such limitations shall be in effect
for such period of time as may be requested by the Company or such underwriters;
provided, however, that in no event shall such period exceed one hundred and
eighty (180) days.

In the event the Company makes any public offering of its securities and
determines in its sole discretion that it is necessary to reduce the number of
issued but unexercised stock purchase rights so as to comply with any state’s
securities or Blue Sky law limitations with respect thereto, the Board shall
have the right in its sole discretion (i) to accelerate the exercisability of
any Option and the date on which such Option must be exercised, provided that
the Company gives the Participant prior written notice of such acceleration, and
(ii) to cancel any Options or portions thereof which Participant does not
exercise prior to or contemporaneously with such public offering.

In the event of any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the Company’s
outstanding shares of Common Stock effected as a class without the Company’s
receipt of consideration, any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 14, to the same extent the purchased shares are
at such time covered by such provisions.

In order to enforce the limitations of this Section 14, the Company may impose
stop-transfer instructions with respect to the purchased shares until the end of
the applicable standoff period.

SECTION 15. AMENDMENT AND TERMINATION

 

15.1 Amendment, Suspension or Termination of Plan

The Board may amend, suspend or terminate the Plan or any portion of the Plan at
any time and in such respects as it shall deem advisable; provided, however,
that to the extent required for compliance with Section 422 of the Code or any
applicable law or regulation, stockholder approval shall be required for any
amendment that would: (a) increase the total number of shares of Common Stock
available for issuance under the Plan; (b) modify the class of employees
eligible to receive Options; or (c) otherwise require stockholder approval under
any applicable law or regulation. Any amendment made to the Plan that would
constitute a “modification” to Incentive Stock Options outstanding on the date
of such amendment shall not, without the consent of a Participant, be applicable
to such outstanding Incentive Stock Options but shall have prospective effect
only.

 

15.2 Term of Plan

The Plan shall have no fixed expiration date; provided, however, that no
Incentive Stock Options may be granted more than ten (10) years after the later
of (a) the adoption by the Board of the Plan and (b) the adoption by the Board
of any amendment to the Plan that constitutes the adoption of a new plan for
purposes of Section 422 of the Code.

 

15.3 Consent of Participant

The suspension, amendment or termination of the Plan or a portion thereof or the
amendment of an outstanding Award shall not, without a Participant’s consent,
materially adversely affect any rights under any Award theretofore granted to a
Participant under the Plan. Any change or adjustment to an outstanding Incentive
Stock Option shall not, without the consent of a Participant, be made in a
manner so as to constitute a “modification” that would cause such Incentive
Stock Option to fail to continue to qualify as an Incentive Stock Option.
Notwithstanding the foregoing, any adjustments made pursuant to Sections 12.1
through 12.3 shall not be subject to these restrictions.

 

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SECTION 16. GENERAL

 

16.1 Evidence of Awards

Awards granted under the Plan shall be evidenced by a written instrument that
shall contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and that are not inconsistent with the Plan.

 

16.2 No Individual Rights

Nothing in the Plan or any Award granted under the Plan shall be deemed to
constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Company or limit in any way the
right of the Company or any Related Company to terminate a Participant’s
employment or other relationship at any time, with or without Cause.

 

16.3 Issuance of Shares

Notwithstanding any other provision of the Plan, the Company shall have no
obligation to issue or deliver any shares of Common Stock under the Plan or make
any other distribution of benefits under the Plan unless, in the opinion of the
Company’s counsel, such issuance, delivery or distribution would comply with all
applicable laws (including, without limitation, the requirements of the
Securities Act), and the applicable requirements of any securities exchange or
similar entity.

The Company shall be under no obligation to any Participant to register for
offering or resale or to qualify for exemption under federal, state and/or other
securities laws any shares of Common Stock, security or interest in a security
paid or issued under, or created by, the Plan, or to continue in effect any such
registrations or qualifications if made.

To the extent the Plan or any instrument evidencing an Award provides for
issuance of stock certificates to reflect the issuance of shares of Common
Stock, the issuance may be effected on a noncertificated basis, to the extent
not prohibited by applicable law or the applicable rules of any stock exchange.
As a condition to the exercise of an Option or any other receipt of Common Stock
pursuant to an Award under the Plan, the Company may require (a) a Participant
to represent and warrant at the time of any such exercise or receipt that such
shares are being purchased or received only for a Participant’s own account and
without any present intention to sell or distribute such shares and (b) such
other action or agreement by a Participant as may from time to time be necessary
to comply with the federal, state and/or other securities laws. At the option of
the Company, a stop-transfer order against any such shares may be placed on the
official stock books and records of the Company, and a legend indicating that
such shares may not be pledged, sold or otherwise transferred, unless an opinion
of counsel is provided (concurred in by counsel for the Company) stating that
such transfer is not in violation of any applicable law or regulation, may be
stamped on stock certificates to ensure exemption from registration. The Plan
Administrator may also require a Participant to execute and deliver to the
Company a purchase agreement or such other agreement as may be in use by the
Company at such time that describes certain terms and conditions applicable to
the shares.

 

16.4 No Rights as a Stockholder

A Participant (or the Participant’s successor or successors) shall have no
rights as a stockholder with respect to any shares of Common Stock covered by an
Option or Stock Award until the date of the issuance of a stock certificate
evidencing such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date such stock
certificate is actually issued (except as otherwise provided in Section 14 of
the Plan).

 

16.5 Compliance With Laws and Regulations

Notwithstanding anything in the Plan to the contrary, the Plan Administrator, in
its sole discretion, may bifurcate the Plan so as to restrict, limit or
condition the use of any provision of the Plan to Participants who are officers
or directors subject to Section 16 of the Exchange Act without so restricting,
limiting or conditioning the Plan with respect to other Participants.
Additionally, in interpreting and applying the provisions of the Plan, any
Option granted as an Incentive Stock Option pursuant to the Plan shall, to the
extent permitted by law, be construed as an “incentive stock option” within the
meaning of Section 422 of the Code.

 

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16.6 Participants in Other Countries

The Plan Administrator shall have the authority to adopt such modifications,
procedures and subplans as may be necessary or desirable to comply with
provisions of the laws of other countries in which the Company or any Related
Company may operate to assure the viability of the benefits from Awards granted
to Participants employed in such countries and to meet the objectives of the
Plan.

 

16.7 No Trust or Fund

The Plan is intended to constitute an “unfunded” plan. Nothing contained herein
shall require the Company to segregate any monies or other property, or shares
of Common Stock, or to create any trusts, or to make any special deposits for
any immediate or deferred amounts payable to any Participant, and no Participant
shall have any rights that are greater than those of a general unsecured
creditor of the Company.

 

16.8 Severability

If any provision of the Plan or any Award is determined to be invalid, illegal
or unenforceable in any jurisdiction, or as to any Person, or would disqualify
the Plan or any Award under any law deemed applicable by the Plan Administrator,
such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the Plan
Administrator’s determination, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction, Person or
Award, and the remainder of the Plan and any such Award shall remain in full
force and effect.

 

16.9 Choice of Law

The Plan and all determinations made and actions taken pursuant hereto, to the
extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of Colorado without giving effect to
principles of conflicts of law.

 

16.10   Appendix Provisions

Participants who are residents of the State of California shall be subject to
the additional terms and conditions set forth in Appendix A to the Plan,
attached hereto, until such time as the Common Stock becomes a “listed” security
under the Securities Act.

SECTION 17. EFFECTIVE DATE

The “effective date” is the date on which the Plan is adopted by the Board. If
the stockholders of the Company do not approve the Plan within twelve
(12) months after the Board’s adoption of the Plan, any Incentive Stock Options
granted under the Plan will be treated as Nonqualified Stock Options.

 

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APPENDIX A

TO THE

LEGEND OIL AND GAS, LTD. 2011 STOCK INCENTIVE PLAN

(For California Residents Only)

This Appendix to the LEGEND OIL AND GAS, LTD. 2011 Stock Incentive Plan (the
“Plan”) shall have application only to Participants who are residents of the
State of California. Capitalized terms contained herein shall have the same
meanings given to them in the Plan, unless otherwise provided in this Appendix.
Notwithstanding any provision contained in the Plan to the contrary and to the
extent required by applicable law, the following terms and conditions shall
apply to all Awards granted to residents of the State of California, until such
time as the Common Stock becomes a “listed security” under the Securities Act:

1. Options shall have a term of not more than ten years from the Grant Date.

2. Awards shall be nontransferable other than by will or the laws of descent and
distribution. Notwithstanding the foregoing, and to the extent permitted by
Section 422 of the Code, the Plan Administrator, in its discretion, may permit
transfer of an Award to a revocable trust or as otherwise permitted by Rule 701
of the Securities Act.

3. Unless employment or services are terminated for Cause, the right to exercise
an Option in the event of Termination of Service, to the extent that the
Participant is otherwise entitled to exercise an Option on the date of
Termination of Service, shall be (a) at least six months from the date of a
Participant’s Termination of Service if termination was caused by death or
Disability, and (b) at least 30 days from the date of a Participant’s
Termination of Service if termination of employment was caused by other than
death or Disability, (c) but in no event later than the Option Expiration Date.

4. No Award may be granted to a resident of California more than ten years after
the earlier of the date of adoption of the Plan and the date the Plan is
approved by the stockholders.

5. Stockholders of the Company must approve the Plan by the later of (a) within
12 months before or after the Plan is adopted by the Board and (b) prior to or
within 12 months of the grant of an Option under the Plan to a resident of the
State of California, except that stockholders must approve the Plan prior to
issuance of any securities under the Plan (other than Options) distributed or
sold to Participants who are residents of the State of California. Any Option
exercised by a California resident or shares issued under an Award to a
California resident shall be rescinded if stockholder approval is not obtained
in the foregoing manner. Shares subject to such Awards shall not be counted in
determining whether such approval is obtained.

6. To the extent required by applicable law, the Company shall provide annual
financial statements of the Company to each California resident holding an
outstanding Award under the Plan. Such financial statements need not be audited
and need not be issued to key persons whose duties at the Company assure them
access to equivalent information.

 

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LEGEND OIL AND GAS, LTD. 2011 STOCK INCENTIVE PLAN

ADOPTION AND AMENDMENTS/ADJUSTMENTS

SUMMARY PAGE

 

Date of Board Action

  

Action

  

Section/Effect of Amendment

  

Stockholder Approval

May 8, 2011

   Initial Plan Adoption       None February 7, 2012    Amendment   

Section 2 – Definition of Fair Market Value

 

Section 12.3.1 – 100% acceleration on a Company Transaction

 

Section 13.1, 13.2, 13.3, 13.4 – deleted

 

New Appendix A

   None

 

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