forms8061708ex4-1.htm


    


    Exhibit
4.1

    


    POWER OIL & GAS
INC.

    


    2007 STOCK OPTION
PLAN

    


    


    


       

      


      1. Purpose.

      


      The
Purpose of the POWER OIL & GAS INC. 2007 Stock Option Plan (“Plan”) is to provide
to key employees, officers, directors, consultants and agents of Power Oil &
Gas Inc. (the “Corporation”), or any
of its subsidiaries, added incentive for high levels of performance and to
reward unusual efforts which increase the earnings and long-term growth of the
Corporation.  It is intended to accomplish the foregoing by providing
for the grant of Stock Options to qualified eligible
individuals.  Except where the context otherwise requires, the term
“Corporation” shall include Power Oil & Gas Inc., a Canadian corporation,
and all present and future subsidiaries of the Corporation.

      


      2. Certain
Definitions.

      


      As used
in this Plan, the following words and phrases shall have the respective meanings
set forth below, unless the context clearly indicates a contrary
meaning.

      


      (a)           “Board of Directors”
or “Board”
shall mean the Board of Directors of the Corporation.

      


      (b) “Cause” shall mean any
one or more of the following:

      


      
        	
                 
      

              	
                (i)

              	
                a
      material breach of any term of employment, consultation or engagement with
      the Corporation by the Optionee.

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                the
      continuing, repeated willful failure or refusal by the Optionee to
      substantially perform his responsibilities on behalf of the
      Corporation.

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                an
      act or omission of the Optionee that is materially adverse to the
      business, goodwill or reputation of the
  Corporation.

              


      

      


      
        	
                 
      

              	
                               
      (iv)

              	
                an
      act of dishonesty.

              


      

      


      (v)           the
commission of a felony.

      


      
        	
                                                                               
      (vi)  

              	
                the
      breach of a fiduciary duty or
fraud.

              


      

      


      
        	
                 
      

              	
                               
      (vii)

              	
                an
      act of moral turpitude.

              


      

      


      
        	
                 
      

              	
                (viii)

              	
                a
      determination by a physician licensed in the jurisdiction where the
      Optionee is employed that the Optionee is a chronic alcoholic or a
      narcotics addict (as such term is defined under the applicable law of such
      jurisdiction), or

              


      

      


      
        	
                                                                               
      (ix)  

              	
                any
      “cause” for termination or discharge as may be otherwise defined in any
      employment, consultation or engagement agreement between the Optionee and
      the Corporation.

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      The
determination of the Option Committee with respect to whether a termination for
Cause has occurred shall be submitted to the Board of Directors, whose decision
shall be final and conclusive.

      


      (c)             “Change of Control”
shall mean (i) an acquisition of any voting securities of the Corporation (the
“Voting
Securities”) by any “Person” (as the term person is used for purposes of
Section 13(d) or 14(d) of the Exchange Act), immediately after which such Person
has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of forty percent (40%) or more of the then outstanding shares
or the combined voting power of the Corporation’s then outstanding Voting
Securities; (ii) the individuals who, as of the Effective Date are members of
the Board (the “Incumbent Board”),
cease for any reason to constitute at least two-thirds of the members of the
Board; provided,
however, that if the election, or nomination of the members of the
Corporation’s common stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall, for
purposes of this Plan, be considered as a member of the Incumbent Board; (iii)
the consummation of a merger, consolidation or reorganization with or into the
Corporation or in which securities of the Corporation are issued unless such
merger, consolidation or reorganization is a “Non-Control Transaction”; (iv) a
complete liquidation or dissolution of the Corporation; or (v) the sale or other
disposition of all or substantially all of the assets of the Corporation to any
Person (other than a transfer to a Subsidiary or the distribution to the
Corporation’s stockholders of the stock of a Subsidiary or any other
assets).

      


      Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”)
acquired Beneficial Ownership of more than the permitted amount of the then
outstanding Shares or Voting Securities as a result of the acquisition of Shares
or Voting Securities by the Corporation which, by reducing the number of Shares
or Voting Securities then outstanding, increases the proportional number of
shares Beneficially Owned by the Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the
acquisition of Shares or Voting Securities by the Corporation, and after such
share acquisition by the Corporation, the Subject Person becomes the Beneficial
Owner of any additional Shares or Voting Securities which increases the
percentage of the then outstanding Shares or Voting Securities Beneficially
Owned by the Subject Person, then a Change in Control shall occur.

      


      (d)             “Disability” shall
mean the inability to engage in any substantial gainful activity by reason of
any medically determined physical or mental impairment which can be expected to
result in death or which has lasted or can be expected to last for a continuous
period of not less than twelve (12) months as determined by the Option Committee
in their sole discretion.

      


      (e)             “Effective Date” shall
mean the date on which the Plan is approved by a majority of the outstanding
shares of capital stock of the Corporation entitled to vote
thereon.

      


      (f)             “Exchange Act” shall
mean the Securities and Exchange Act of 1934, as amended.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (g)             “Fair Market Value per
Share” shall mean as of any date the fair market value of each of the
Shares on such date (the “applicable date”) as determined by the Option
Committee in good faith.  The Option Committee is authorized to make
its determination as to the fair market value on the following basis: (i) if the
Shares are not traded on a securities exchange and are not quoted on the
National Association of Securities Dealers, Inc.’s Automated Quotation System
(“NASDAQ”), but are quoted on the Over The Counter Electronic Bulletin Board
operated by NASDAQ, “Fair Market Value per Share” shall be the mean between the
average daily bid and average daily asked prices of the Shares on the applicable
date, as published on such bulletin board; (ii) if the Shares are not traded on
a securities exchange and are quoted on NASDAQ, “Fair Market Value per Share”
shall be the closing transaction price of the Shares on the applicable date, as
reported on NASDAQ; (iii) if the Shares are traded on a securities exchange,
“Fair Market Value per Share” shall be the daily closing price of the Shares, on
such securities exchange as of the applicable date; or (iv) if the Shares are
traded other than as described in (i), (ii) or (iii) above, or if the Shares are
not publicly traded, “Fair Market Value per Share” shall be the value determined
by the Option Committee in good faith based upon the fair market value as
determined by completely independent and well qualified experts.  In
the case of Shares described in (i), (ii) or (iii) above, if no prices are
reported for the Shares on the applicable date, the “Fair Market Value per
Share” shall be the price reported for such Shares on the next preceding date on
which there were reported prices.

      


      (h) “Granting Date” shall
mean the date on which the grant of an Option is made effective by the Option
Committee.

      


      (i)             “Non-Control
Transaction” shall mean a merger, consolidation or reorganization with or
into the Corporation or in which securities of the Corporation are issued
where:

      


      


      
        	
                 
      

              	
                (a)

              	
                the
      stockholders of the Corporation, immediately before such merger,
      consolidation or reorganization, own directly or indirectly immediately
      following such merger, consolidation or reorganization, at least fifty
      percent (50%) of the combined voting power of the outstanding voting
      securities of the corporation resulting from such merger or consolidation
      or reorganization (the “Surviving
      Corporation”) in substantially the same proportion as their
      ownership of the Voting Securities immediately before such merger,
      consolidation or reorganization,

              


      

      


      
        	
                 
      

              	
                (b)

              	
                the
      individuals who were members of the Incumbent Board immediately prior to
      the execution of the agreement providing for such merger, consolidation or
      reorganization constitute at least two-thirds of the members of the board
      of directors of the Surviving Corporation, or a corporation beneficially
      directly or indirectly owning a majority of the Voting Securities of the
      Surviving Corporation, and

              


      


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      


      
        	
                 
      

              	
                (c)

              	
                no
      Person other than (1) the Corporation, (2) any Subsidiary, (3) any
      employee benefit plan (or any trust forming a part thereof) that,
      immediately prior to such merger, consolidation or reorganization, was
      maintained by the Corporation or any Subsidiary, or (4) any Person who,
      immediately prior to such merger, consolidation or reorganization had
      Beneficial Ownership of thirty percent (30%) or more of the then
      outstanding Voting Securities or Shares, has Beneficial Ownership of
      thirty percent (30%) or more of the combined voting power of the Surviving
      Corporation’s then outstanding voting securities or its common
      stock.

              


      

      


      (j)           “Option” shall man any
option to purchase Shares of the Corporation granted under the
Plan.

      


      (k)  “Option Agreement”
shall mean the document setting forth the terms and conditions of each
Option.

      


      (l)           “Option Committee”
shall mean the Committee selected and designated by the Board of Directors to
administer the Plan, consisting of not less than one member of the Board of
Directors.

      


      (m)           “Optionee” shall mean
the holder of an Option.

      


      (n)           “Retirement” shall
have the meaning ascribed by the Option Committee.

      


      (o)           “Securities Act” shall
mean the Securities Act of 1933, as amended.

      


      (p)           “Shares” shall mean
the shares of common stock, no par value per share, of the
Corporation.

      


      (q)           “Subsidiary” shall
mean any corporation (other than Power Oil & Gas Inc.) in an unbroken chain
of corporations beginning with Power Oil & Gas Inc., if 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 of the other corporations in such chain.

      


      (r) “Ten Percent
Shareholder” shall mean an individual who, at the time an Option is
granted, owns stock possessing more than 10% of the total combined voting power
of all classes of stock of the Corporation or its parent, if any.

      


      3.           Stock
Options.

      


      (a)   In
General.  Awards under the Plan shall be granted in the form of
Common Stock Options.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (b)   Limitation on Number of
Shares.  The aggregate number of Shares which may be issued and
purchased under the Plan shall not exceed 5,000,000 Shares, subject to any Share
adjustments pursuant to Section 9.  Shares may be either authorized
and unissued Shares or issued Shares reacquired by the
Corporation.  The total number of Shares subject to Options authorized
under the Plan shall be subject to increase or decrease, as necessary, in order
to give effect to the adjustment provisions of Section 9 hereof and to give
effect to any amendment adopted as provided in Section 14
hereof.  Notwithstanding the above limitation, any Shares subject to
an Option which terminates, is cancelled or expires for any reason without being
exercised in full, may again be subject to an Option under the Plan, unless the
Plan shall have been terminated.  At the discretion of the Option
Committee, existing Options may be cancelled and new options granted at a lower
price in the event of a decline in the market value of the Shares. If Shares
issued upon exercise of an Option under the Plan are tendered to the Corporation
in partial or full payment of the exercise price of an Option granted under the
Plan, such tendered Shares shall not be available for subsequent Option grants
under the Plan.

      


      4. Eligibility.

      


      (a)  In
General.  Officers, Directors, employees, consultants, and
agents of the Corporation (whether or not employees of the Corporation) shall be
eligible to receive grants of Stock Options.  Within the foregoing
limits, the Option Committee, in its sole and absolute discretion, shall, from
time to time, determine (i) the individuals or the class of individuals to whom
Options may be granted hereunder, (ii) the number of Shares to be covered by
each of the Options granted hereunder, (iii) the purchase price of the Shares
and the method of payment for such Shares, (iv) the terms and provisions of the
respective Option Agreement and (v) the times at which such Options shall be
granted.  The Option Committee shall take into account such factors as
it shall deem relevant in connection with accomplishing the purpose of the Plan
as set forth in Section 1 hereof.  All such determinations and
designations of individuals eligible to receive Options under the Plan shall be
made in the absolute discretion of the Option Committee and shall not require
the approval of the stockholders, except as expressly set forth
herein.

      


      (b)   Additional
Options.  An individual who has been granted an Option may be
granted additional Options if the Option Committee shall so
determine.  In addition, new Options may be granted in substitution
for Options previously granted under this Plan or another plan of the
Corporation or under the plan of another corporation assumed by the
Corporation.

      


        (c)   Option
Agreement.  Each Option granted pursuant to the Plan shall be
evidenced by a written Option Agreement entered into between the Corporation and
the Optionee which shall contain such terms and provisions, including, but not
limited to, the period of exercise, whether in installments or otherwise, the
exercise price and such other terms and conditions as the Option Committee
shall, in its sole discretion, determine to be appropriate and within the
contemplation of the Plan.  The terms and conditions of such written
Option Agreement need not be the same for all Options granted under the
Plan.

      


      5.           Administration
of Plan.

      


      (a)       Option
Committee.  This Plan shall be administered by the Option
Committee, subject to the approval and ratification by the Board of
Directors.  Any action of the Option Committee with respect to
administration of the Plan shall be taken pursuant to (i) a majority vote at a
meeting of the Option Committee (to be documented by minutes), or (ii) the
unanimous written consent of its members.  The Option Committee may
meet in person, by telephone, or by any other means which it deems to be
advisable and convenient.  All actions taken by the Option Committee
shall be submitted to the Board of Directors for ratification and approval. In
the absence of an Option Committee, this Plan shall be administered by the Board
of Directors.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      (b)      Vacancies.  Vacancies
in the Option Committee shall be filled by the Board of Directors.  In
addition, the Board of Directors may at any time remove one or more members of
the Option Committee and substitute others, and a majority of disinterested
members of the Board of Directors shall at all times have the right to exercise
any and all rights and powers of the Option Committee.

      


      (c)     Authority.  The
Option Committee shall have the authority, exercisable in its discretion,
subject to express provisions of this Plan and subject to the approval and
ratification by the Board of Directors, to: (i) construe and interpret the
provisions of the Plan, decide all questions and settle all controversies and
disputes which may arise in connection with the Plan; (ii) prescribe, amend and
rescind rules and regulations relating to the administration of the Plan; (iii)
determine the exercise price of the Shares covered by each Option granted
hereunder and the method of payment for such Shares, the individuals to whom,
and the time or times at which, any Option granted hereunder shall be granted
and exercisable, the number of Shares covered by each Option granted hereunder,
(iv) determine the terms and provisions of the respective Option Agreements
(which need not be identical); (v) determine the duration and purposes of leaves
of absence which may be granted to eligible individuals without constituting a
termination of their employment for purposes of the Plan; and (vi) make all
other determinations necessary or advisable for the administration of the
Plan.  Determinations of the Option Committee on matters referred to
in this Section shall be conclusive and binding on all parties howsoever
concerned.  No member of the Option Committee shall be liable for any
action, omission or determination made in good faith in connection with the
Plan.

      


      6. Exercise
Price.

      


      The
exercise price of each Stock Option shall be determined by the Option Committee,
and in default of any specific determination, shall be equal to one hundred
percent (100%) of the Fair Market Value per Share on the Granting Date of the
Stock Option.

      


      7. Period of Exercise and
Certain Limitations on Right to Exercise.

      


      (a)           Period of
Exercise.  Each Option granted under the Plan shall be
exercisable at such times and under such conditions as may be determined by the
Option Committee at the Granting Date and as shall be set forth in the Option
Agreement; provided, however, in no event shall an Option be exercisable after
the expiration of ten (10) years from its Granting Date.

      


      (b)           Change of
Control.  Unless otherwise provided in any Option Agreement,
all Options granted pursuant to the Plan shall become fully and immediately
exercisable with respect to all Shares subject thereto, upon a Change of
Control.

      


      (c
)           Effect of Termination of
Employment or Other Relationship.  The effect of the
termination of an Optionee’s employment or other relationship with the
Corporation on such Optionee’s eligibility to exercise any Options awarded
pursuant to the Plan shall be as follows:

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        	
                                                               
      (i)  

              	
                Disability or
      Death.  If an Optionee ceases to be employed by, or
      ceases to have a relationship with, the Corporation by reason of
      Disability or death, any Option heretofore granted which remains
      unexercised at the time of termination shall become fully vested and
      exercisable and shall expire not later than one (1) year
      thereafter.  During such one (1) year period and prior to the
      expiration of the Option by its terms, the Optionee, or his or her
      executor or administrator or the person or persons to whom the Option is
      transferred by will or the applicable laws of descent and distribution,
      may exercise such Option, and except as so exercised, such Option shall
      expire at the end of one (1) year period unless such Option by its terms
      expires before such date.  The decision as to whether a
      termination by reason of Disability has occurred shall be made by the
      Option Committee, whose decision shall be final and
      conclusive.

              


      

      


      
        	
                 
      

              	
                (ii)

              	
                Retirement.  If
      the Optionee ceases to be employed by, or ceases to have a relationship
      with the Corporation by reason of Retirement, any Option heretofore
      granted which remains unexercised at the time of such Retirement shall
      become fully vested and exercisable and shall expire not later than three
      (3) months thereafter.  During such period and prior to the
      expiration of the Option by its terms, such Option may be exercised by the
      Optionee, and except as so exercised, shall expire at the end of such
      relevant period unless such Option by its terms expires before such
      date.  The decision as to whether a termination is by reason of
      Retirement shall be made by the Option Committee, whose decision shall be
      final and conclusive.

              


      

      


      
        	
                 
      

              	
                (iii)

              	
                Voluntary Termination
      or Termination by the Corporation.  If an Optionee’s
      employment by, or relationship with, the Corporation is terminated
      voluntarily or, by the Corporation, whether such termination is for Cause
      or for no reason whatsoever, any Option heretofore granted which remains
      unexercised at the time of such termination shall expire immediately,
      provided, however, that the Option Committee may, in its sole and absolute
      discretion, within thirty (30) days of such termination, waive the
      expiration of any Option awarded under the Plan, by giving written notice
      of such waiver to the Optionee at such Optionee’s last known
      address.  In the event of such waiver, the Optionee may exercise
      any such Options only to such extent, for such time, and upon such terms
      and conditions set forth in subparagraph (i) above.  The
      determination as to whether a termination is voluntary or for Cause shall
      be made by the Option Committee, whose decision shall be final and
      conclusive.

              


      

      


      (d)           Shares held for
Investment.  The Option Committee may, if it or counsel for the
Corporation shall deem it necessary or desirable for any reason, require as a
condition of exercise, that the Optionee or any other person entitled to
exercise an Option hereunder, represent in writing to the Corporation at the
time of exercise of such Option that it is their intention to acquire the Shares
as to which the Option is being exercised for investment purposes and not with a
view to the sale or distribution thereof.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      (e)           Transferability.  Options
granted under the Plan to an Optionee shall not be transferable other than by
will or the laws of descent and distribution, and such Options shall be
exercisable, during the Optionee’s lifetime, only by him or his legal guardian
or legal representative.  A transfer of an Option by will or the laws
of descent and distribution shall not be effective unless the Option Committee
shall have been furnished with such evidence as it may deem necessary to
establish the validity of the transfer.

      


      


      8.           Payment
of Exercise Price and Cancellation of Options.

      


      (a)           Notice of
Exercise.  An Option granted under the Plan shall be exercised
by giving written notice to the Secretary of the Corporation (or such other
person designated by the Option Committee) of the Optionee’s intention to
exercise one or more Options hereunder and by delivering payment of the exercise
price therewith, which shall be paid in full at the time of such
exercise.

      


      (b)           Method of
Settlement.  The consideration to be paid for the Shares to be
issued upon exercise of an Option, shall consist of cash or, with the approval
of the Option Committee (which may be withheld in its sole discretion), Shares
having a fair market value on the date of exercise, as determined by the Option
Committee, at least equal to the exercise price or a combination of cash and
Shares or, with the approval of the Option Committee (which may be withheld in
its sole discretion) may also be effected wholly or partly by monies borrowed
from the Corporation pursuant to a promissory note, the terms and conditions of
which shall be determined from time to time by the Option Committee, in its
discretion, separately with respect to each exercise of Options and each
Optionee, or by such other method of payment as may be determined by the Option
Committee in its sole discretion; provided, that each
such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance with
applicable law.  An Optionee may purchase less than the total number
of Shares for which an Option is then exercisable, provided, however, that any
partial exercise of an Option may not be less than for one hundred (100) Shares
and shall not include any fractional Shares.

       

      9.           Share
Adjustment.

      


      If the outstanding Shares of the class
then subject to this Plan are increased or decreased, or are changed into or
exchanged for a different number or kind of shares or securities or other forms
of property (including cash) or rights, as a result of one or more
reorganizations, recapitalizations, spin-offs, stock splits, reverse stock
splits, stock dividends or the like, appropriate adjustments shall be made in
the number and/or kind of Shares or securities or other forms of property
(including cash) or rights for which Options may thereafter be granted under the
Plan and for which Options then outstanding under the Plan may thereafter be
exercised.  Any such Share adjustments shall be made without changing
the aggregate exercise price applicable to the unexercised portions of
outstanding Options.  Any fractional Shares resulting from such
adjustment shall be eliminated by rounding to the nearest whole
number.  Appropriate amendments to the Option Agreements shall be
executed by the Corporation and the Optionees to the extent the Option Committee
determines that such amendments are necessary or desirable to reflect such Share
adjustments.  If determined by the Option Committee to be appropriate,
in the event of any Share adjustment involving the substitution of securities of
a corporation other than the Corporation, the Option Committee shall make
arrangements for the assumption by such other corporation of any Options then or
thereafter outstanding under the Plan, without any change in the total exercise
price applicable to the unexercised portion of the Options but with an
appropriate adjustment to the number of securities, kind of securities and
exercise price for each of the securities subject to the Options.  The
determination by the Option Committee as to what adjustment, amendments
or


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      arrangements
shall be made pursuant to this Section 9 and the extent thereof, shall be final
and conclusive.

      


      In the
event of the proposed dissolution or liquidation of the Corporation, or a
proposed sale of substantially all of the assets of the Corporation, or in the
event of any merger or consolidation of the Corporation with or into another
corporation, or in the event of any corporate separation or division, including,
but not limited to, a split-up, split-off or spin-off, or other transaction in
which the outstanding Shares then subject to Options under the Plan are changed
into or exchanged for property (including cash), rights and/or securities other
than, or in addition to, shares of the Corporation, the Option Committee may
provide that the holder of each Option then exercisable shall have the right to
exercise such Option solely for the kind and amount of shares of stock and other
securities, property, cash or any combination thereof receivable upon such
dissolution, liquidation, sale, consolidation or merger, or similar corporate
event, by a holder of the number of Shares for which such Option might have been
exercised immediately prior to such dissolution, liquidation, sale,
consolidation or merger or similar corporate event; or, in the alternative, the
Option Committee may provide that each Option granted under the Plan shall
terminate as of a date to be fixed by the Board of Directors, provided, that no
less than thirty (30) days prior written notice of the date so fixed shall be
given to each Optionee who shall have the right, during such thirty (30) day
period preceding such termination, to exercise the Options as to all or any part
of the Shares covered thereby, including Shares as to which such Options would
not otherwise be exercisable.

      


      10.           Substitute
Options.

      


      The
Corporation may grant options under the Plan in substitution for options held by
employees of another corporation who become employees of the Corporation as the
result of a merger or consolidation of the employing corporation with the
Corporation, or as a result of the acquisition by the Corporation, of property
or stock of the employing corporation.  The Corporation may direct
that substitute options be granted on such terms and conditions as the Board of
Directors considers appropriate in the circumstances.

      


      11.           Other
Employee Benefits.

      


      


      Except as
to plans which by their terms include such amounts as compensation, the amount
of any compensation deemed to be received by an employee as a result of the
exercise of an option or the sale of Shares received upon such exercise shall
not constitute compensation for purposes of determining such employee’s benefits
under any other employee benefit plan or program in which the employee is a
participant at any time, including, without limitation, benefits under any
bonus, pension, profit-sharing, life insurance or salary continuation plan,
except as otherwise specifically determined by the Board of
Directors.

      


      12.           Terms and
Conditions of Options.

      


      (a)  Withholding of
Taxes.  As a condition to the exercise, in whole or in part, of
any Options, the Option Committee may in its sole discretion require the
Optionee to pay, in addition to the exercise price of the Shares covered by the
Options an amount equal to any Federal, provincial or local taxes that may be
required to be withheld in connection with the exercise of such
Options.  Alternatively, the Corporation may issue or transfer the
Shares pursuant to exercise of the Options net of the number of Shares
sufficient to satisfy the withholding tax requirements.  For
withholding tax purposes, the Shares shall be valued on the date the withholding
obligation is incurred.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      (b)  No Rights to Continued
Employment or Relationship.  Nothing contained in the Plan or
in any Option Agreement shall obligate the Corporation to continue to employ or
to continue any other relationship with any Optionee for any period or interfere
in any way with the right of the Corporation to reduce such Optionee’s
compensation or to terminate the Corporation’s employment or relationship with
any Optionee at any time.

      


      (c) Time of Granting
Options.  The Granting Date shall be the day the Corporation
executes the Option Agreement; provided, however, that if appropriate
resolutions of the Option Committee indicate that an Option is to be granted as
of and on some prior or future date, the Granting Date shall be such prior or
future date.

      


      (d)  Privileges of Stock
Ownership.  No Optionee shall be entitled to the privileges of
stock ownership as to any Shares not actually issued and delivered to such
Optionee.  No Shares shall be issued upon the exercise of any Option
unless and until, in the opinion of the Corporation’s counsel, all applicable
laws, rules and regulations of any governmental or regulatory agencies and any
exchanges upon which stock of the Corporation may be listed, shall have been
fully complied with.

      


      (e)  Securities Laws
Compliance.  The Corporation will diligently comply with all
applicable securities laws before any Options are granted under the Plan and
before any Shares are issued pursuant to the exercise of any
Options.  Without limiting the generality of the foregoing, the
Corporation may require from the Optionee such investment representation or such
agreement, if any, as counsel for the Corporation may consider necessary or
advisable in order to comply with the Securities Act as then in effect, and may
require that the Optionee agree that any sale of the Shares will be made only in
such manner as is permitted by the Option Committee.  The Option
Committee in its discretion may cause the Options and Shares underlying such
Options to be registered under the Securities Act by the filing of a
Registration Statement covering the Options and Shares.  The Optionee
shall take any action reasonably requested by the Corporation in connection with
registration or qualification of the Shares under federal and state securities
laws.

      


      (f)  Option
Agreement.  Each Stock Option granted under this Plan shall be
evidenced by a written Option Agreement executed by the Corporation and the
Optionee containing such terms and conditions as are deemed desirable by the
Option Committee and are not inconsistent with the purpose of the Plan as set
forth in Section 1.

      


      13.  Restricted
Shares.

      


      (a)           In
General.  The Option Committee may, in its discretion, issue
restricted Shares upon the exercise of any Options granted under the
Plan.  Such restricted Shares shall be subject to such vesting
requirements and restrictions on transferability as may be determined by the
Option Committee.

      


      (b)           Legend.  All
stock certificates issued with respect to restricted Shares shall bear an
appropriate legend referring to the terms, conditions, and restrictions
applicable to such Shares.

      


      (c)  Rights Appurtenant to
Restricted Shares.  The issuance of restricted Shares shall not
affect the rights of the Optionee as a stockholder of the Corporation including,
but not limited to the right to receive dividends on and to vote with respect to
such restricted Shares, except that additional shares issued with respect to
restricted Shares including, but not limited to, stock dividends or stock splits
or any securities issued in exchange for restricted Shares shall be subject to
the same restrictions as are applicable to the restricted Shares.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        	
                 
      

              	
                14.

              	
                Plan
      Amendment and Termination.

              


      

      


      (a)           Authority of Option
Committee.  In addition to the authority of the Option
Committee set forth in Section 5, the Option Committee may at any time
discontinue granting Options under the Plan or otherwise suspend, amend or
terminate the Plan and may, with the consent of an Optionee, make such
modification of the terms and conditions of Options theretofore granted as it
shall deem advisable.  Any amendment or modification made pursuant to
the provisions of this Section shall be effective immediately upon adoption,
unless otherwise provided therein, subject to approval thereof (i) within twelve
(12) months before or after the effective date of such amendment or modification
by stockholders of the Corporation holding not less than a majority vote of the
voting power of the Corporation voting in person or by proxy at a duly held
stockholders meeting, (ii) by any appropriate governmental agency if required,
or (iii) by a securities exchange or automated quotation system if
required.  No Option may be granted during any suspension or after
termination of the Plan.

      


      (b)           Effect on Options
Granted.  Any amendment, suspension or termination of the Plan
shall not, without the consent of the Optionee, alter or impair any rights or
obligations under any Option theretofore granted.

      


      15.           Effective
Date of Plan.

      


      The Plan
shall be effective upon the approval of the Board of Directors of the
Corporation (the ”Effective
Date”).

      


      16.           Miscellaneous
Provisions.

      


      (a)           Exculpation and
Indemnification.  The Corporation shall indemnify and hold
harmless the Option Committee from and against any and all liabilities, costs
and expenses incurred by such persons as a result of any act, or omission to
act, in connection with the performance of such persons’ duties,
responsibilities and obligations under the Plan, other than such liabilities,
costs and expenses as may result from gross negligence, bad faith, willful
conduct and/or criminal acts of such persons.

      


      (c)           Use of
Proceeds.  The proceeds from the exercise of Shares granted
under the Plan shall constitute and be considered as general funds of the
Corporation which may be used for any and all corporate purposes as determined
by the Board of Directors.

      


      (d)           Compliance with Applicable
Laws.  The inability of the Corporation to obtain from any
regulatory body having jurisdiction, the authority deemed by the Corporation’s
counsel to be necessary to the lawful issuance and sale of any Shares upon the
exercise of an Option shall relieve the Corporation of any liability in respect
of the non-issuance or sale of such Shares as to which requisite authority shall
not have been obtained.

      


      (e)           Non-Uniform
Determinations.  The Option Committee’s determination under the
Plan (including without limitation determinations of the persons to receive
Options, the form, amount and timing of such Options, the terms and provisions
of such Options and the Option Agreements evidencing same) need not be uniform
and may be made by it selectively among persons who receive, or are eligible to
receive, Options under the Plan, whether or not such persons are similarly
situated.

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Adopted
on Behalf of the Board of Directors

      


      /s/ Paul
Uppal

      ______________________________

      Paul
Uppal, President

      February
13, 2007