IVEDA
CORPORATION

    2009
STOCK OPTION PLAN

     

    1.       
    Establishment, Purpose and
Term of Plan.

     

    1.1          Establishment.  The
Iveda Corporation 2009 Stock Option Plan (the “Plan”)
is hereby established effective as of October 15, 2009.

     

    1.2          Purpose.  The
purpose of the Plan is to advance the interests of the Participating Company
Group and its shareholders by providing an incentive to attract, retain and
reward persons performing services for the Participating Company Group and by
motivating such persons to contribute to the growth and profitability of the
Participating Company Group.

     

    1.3       
  Term of
Plan.  The Plan shall continue in effect until the earlier of
its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed.  However, all Options shall be
granted, if at all, within ten (10) years from the earlier of the date the
Plan is adopted by the Board or the date the Plan is duly approved by the
shareholders of the Company.  The Company intends that the Plan comply
with Section 409A of the Code, including any amendments or replacements of such
section, and the Plan shall be so construed.

     

    2.      
     Definitions and
Construction.

     

    2.1          Definitions. Whenever used
herein, the following terms shall have their respective meanings set forth
below:

     

    (a)           “Affiliate”
means (i) an entity, other than a Parent Corporation, that directly, or
indirectly, through one or more intermediary entities, controls the Company or
(ii) an entity, other than a Subsidiary Corporation, that is controlled by the
Company directly, or indirectly through one or more intermediary
entities.  For this purpose, the term “control” (including the term
“controlled by”) means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of the relevant
entity, whether through the ownership of voting securities, by contract or
otherwise; or shall have such other meaning assigned such term for the purposes
of registration on Form S-8 under the Securities Act.

     

    (b)          “Board”
means the Board of Directors of the Company.  If one or more
Committees have been appointed by the Board to administer the Plan, “Board”
also means such Committee(s).

     

    (c)          “Code”
means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.

     

    (d)          “Committee”
means the Compensation Committee or other committee of the Board duly appointed
to administer the Plan and having such powers as shall be specified by the
Board.  Unless the powers of the Committee have been specifically
limited, the Committee shall have all of the powers of the Board granted herein,
including, without limitation, the power to amend or terminate the Plan at any
time, subject to the terms of the Plan and any applicable limitations imposed by
law.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)          “Company”
means Iveda Corporation, a Nevada corporation fka Charmed Homes Inc., or any
successor corporation thereto.

     

    (f)           “Consultant”
means a person engaged to provide consulting or advisory services (other than as
an Employee or a Director) to a Participating Company, provided that the
identity of such person, the nature of such services or the entity to which such
services are provided would not preclude the Company from offering or selling
securities to such person pursuant to the Plan in reliance on either the
exemption from registration provided by Rule 701 under the Securities Act or, if
the Company is required to file reports pursuant to Section 13 or 15(d) of the
Exchange Act, registration on a Form S-8 Registration Statement under the
Securities Act.

     

    (g)          “Director”
means a member of the Board or of the board of directors of any other
Participating Company.

     

    (h)          “Disability”
means the inability of the Optionee, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of the Optionee’s
position with the Participating Company Group because of the sickness or injury
of the Optionee.

     

    (i)           “Employee”
means any person treated as an employee (including an Officer or a Director who
is also treated as an employee) in the records of a Participating Company and,
with respect to any Incentive Stock Option granted to such person, who is an
employee for purposes of Section 422 of the Code; provided, however, that
neither service as a Director nor payment of a director’s fee shall be
sufficient to constitute employment for purposes of the Plan.  The
Company shall determine in good faith and in the exercise of its discretion
whether an individual has become or has ceased to be an Employee and the
effective date of such individual’s employment or termination of employment, as
the case may be.  For purposes of an individual’s rights, if any,
under the Plan as of the time of the Company’s determination, all such
determinations by the Company shall be final, binding and conclusive,
notwithstanding that the Company or any court of law or governmental agency
subsequently makes a contrary determination.

     

    (j)           “Exchange
Act”
means the Securities Exchange Act of 1934, as amended.

     

    (k)          “Fair Market
Value”
means, as of any date, the value of a share of Stock or other property as
determined by the Board, in its discretion, or by the Company, in its
discretion, if such determination is expressly allocated to the Company herein,
subject to the following:

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (i)           If,
on such date, the Stock is listed on a national or regional securities exchange
or market system, the Fair Market Value of a share of Stock shall be the closing
price of a share of Stock (or the mean of the closing bid and asked prices of a
share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq
National Market, The Nasdaq SmallCap Market or such other national or regional
securities exchange or market system constituting the primary market for the
Stock, as reported in The Wall Street
Journal or such other source as the Company deems reliable.  If
the relevant date does not fall on a day on which the Stock has traded on such
securities exchange or market system, the date on which the Fair Market Value
shall be established shall be the last day on which the Stock was so traded
prior to the relevant date, or such other appropriate day as shall be determined
by the Board, in its discretion.

     

    (ii)           If,
on such date, the Stock is not listed on a national or regional securities
exchange or market system, the Fair Market Value of a share of Stock shall be as
determined by the Board in good faith without regard to any restriction other
than a restriction which, by its terms, will never lapse, and subject to
compliance with Section 409A of the Code.

     

    (l)           “Incentive Stock
Option”
means an Option intended to be (as set forth in the Option Agreement) and which
qualifies as an incentive stock option within the meaning of Section 422(b)
of the Code.

     

    (m)         “Insider”
means an Officer, Director of the Company, or other person whose transactions in
Stock are subject to Section 16 of the Exchange Act.

     

    (n)          “Nonstatutory
Stock Option”
means an Option not intended to be (as set forth in the Option Agreement) or
which does not qualify as an Incentive Stock Option.

     

    (o)          “Officer”
means any person designated by the Board as an officer of the
Company.

     

    (p)          “Option”
means a right to purchase Stock pursuant to the terms and conditions of the
Plan.  An Option may be either an Incentive Stock Option or a
Nonstatutory Stock Option.

     

    (q)          “Option
Agreement”
means a written agreement between the Company and an Optionee setting forth the
terms, conditions and restrictions of the Option granted to the Optionee and any
shares acquired upon the exercise thereof.  An Option Agreement may
consist of a form of “Notice of Grant of Stock Option” and a form of “Stock
Option Agreement” incorporated therein by reference, or such other form or forms
as the Board may approve from time to time.

     

    (r)           “Optionee”
means a person who has been granted one or more Options.

     

    (s)          “Parent
Corporation”
means any present or future “parent corporation” of the Company, as defined in
Section 424(e) of the Code.

     

    (t)           “Participating
Company”
means the Company or any Parent Corporation, Subsidiary Corporation or
Affiliate.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (u)          “Participating
Company Group”
means, at any point in time, all entities collectively which are then
Participating Companies.

     

    (v)          “Rule
16b-3”
means Rule 16b-3 under the Exchange Act, as amended from time to time, or
any successor rule or regulation.

     

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

     

    (x)          “Service”
means an Optionee’s employment or service with the Participating Company Group,
whether in the capacity of an Employee, a Director or a
Consultant.  An Optionee’s Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee’s
Service.  Furthermore, an Optionee’s Service shall not be deemed to
have terminated if the Optionee takes any military leave, sick leave, or other
bona fide leave of absence approved by the Company; provided, however, that if
any such leave exceeds ninety (90) days, on the one hundred eighty-first (181st)
day following the commencement of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and instead
shall be treated thereafter as a Nonstatutory Stock Option unless the Optionee’s
right to return to Service is guaranteed by statute or
contract.  Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under the Optionee’s Option
Agreement.  The Optionee’s Service shall be deemed to have terminated
either upon an actual termination of Service or upon the corporation for which
the Optionee performs Service ceasing to be a Participating
Company.  Subject to the foregoing, the Company, in its discretion,
shall determine whether the Optionee’s Service has terminated and the effective
date of such termination.

     

    (y)          “Stock”
means the common stock of the Company, as adjusted from time to time in
accordance with Section 4.2.

     

    (z)          “Subsidiary
Corporation”
means any present or future “subsidiary corporation” of the Company, as defined
in Section 424(f) of the Code.

     

    (aa)        “Ten Percent Owner
Optionee”
means an Optionee who, at the time an Option is granted to the Optionee, owns
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of a Participating Company within the meaning of
Section 422(b)(6) of the Code.

     

    2.2          Construction.  Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of the Plan.  Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular.  Use of the term “or” is not
intended to be exclusive, unless the context clearly requires
otherwise.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.      
     Administration.

     

    3.1          Administration by the
Board.  The Board shall administer the Plan.  The
Board shall determine all questions of interpretation of the Plan or of any
Option, and such determinations shall be final and binding upon all persons
having an interest in the Plan or such Option.

     

    3.2          Authority of
Officers.  Any Officer shall have the authority to act on
behalf of the Company with respect to any matter, right, obligation,
determination or election which is the responsibility of or which is allocated
to the Company herein, provided the Officer has apparent authority with respect
to such matter, right, obligation, determination or election.

     

    3.3          Powers of the Board.  In
addition to any other powers set forth in the Plan and subject to the provisions
of the Plan, the Board shall have the full and final power and authority, in its
discretion:

     

    (a)           to
determine the persons to whom, and the time or times at which, Options shall be
granted and the number of shares of Stock to be subject to each
Option;

     

    (b)           to
designate Options as Incentive Stock Options or Nonstatutory Stock
Options;

     

    (c)           to
determine the Fair Market Value of shares of Stock or other
property;

     

    (d)           to
determine the terms, conditions and restrictions applicable to each Option
(which need not be identical) and any shares acquired upon the exercise thereof,
including, without limitation, (i) the exercise price of the Option, (ii) the
method of payment for shares purchased upon the exercise of the Option, (iii)
the method for satisfaction of any tax withholding obligation arising in
connection with the Option or such shares, including by the withholding or
delivery of shares of stock, (iv) the timing, terms and conditions of the
exercisability of the Option or the vesting of any shares acquired upon the
exercise thereof, (v) the time of the expiration of the Option, (vi) the effect
of the Optionee’s termination of Service with the Participating Company Group on
any of the foregoing, and (vii) all other terms, conditions and restrictions
applicable to the Option or such shares not inconsistent with the terms of the
Plan;

     

    (e)           to
approve one or more forms of Option Agreement;

     

    (f)           to
amend, modify, extend, cancel or renew any Option or to waive any restrictions
or conditions applicable to any Option or any shares acquired upon the exercise
thereof;

     

    (g)           to
accelerate, continue, extend or defer the exercisability of any Option or the
vesting of any shares acquired upon the exercise thereof, including with respect
to the period following an Optionee’s termination of Service with the
Participating Company Group;

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (h)           to
prescribe, amend or rescind rules, guidelines and policies relating to the Plan,
or to adopt supplements to, or alternative versions of, the Plan, including,
without limitation, as the Board deems necessary or desirable to comply with the
laws of, or to accommodate the tax policy or custom of, foreign jurisdictions
whose citizens may be granted Options; and

     

    (i)           to
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or any Option Agreement and to make all other determinations and take such
other actions with respect to the Plan or any Option as the Board may deem
advisable to the extent not inconsistent with the provisions of the Plan or
applicable law.

     

    3.4          Administration with Respect to
Insiders.  With respect to participation by Insiders in the
Plan, at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered
in compliance with the requirements, if any, of Rule 16b-3.

     

    3.5          Indemnification.  In
addition to such other rights of indemnification as they may have as members of
the Board or officers or employees of the Participating Company Group, members
of the Board and any officers or employees of the Participating Company Group to
whom authority to act for the Board or the Company is delegated shall be
indemnified by the Company against all reasonable expenses, including attorneys’
fees, actually and necessarily incurred in connection with the defense of any
action, suit or proceeding, or in connection with any appeal therein, to which
they or any of them may be a party by reason of any action taken or failure to
act under or in connection with the Plan, or any right granted hereunder, and
against all amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such action, suit or proceeding,
except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such person is liable for gross negligence, bad faith or
intentional misconduct in duties; provided, however, that within sixty (60) days
after the institution of such action, suit or proceeding, such person shall
offer to the Company, in writing, the opportunity at its own expense to handle
and defend the same.

     

    4.        
   Shares Subject to
Plan.

     

    4.1          Maximum Number of Shares
Issuable.  Subject to adjustment as provided in Section 4.2, the
maximum aggregate number of shares of Stock that may be issued under the Plan
shall be One Million Five Hundred Thousand (1,500,000) and shall consist of
authorized but unissued or reacquired shares of Stock or any combination
thereof.  If an outstanding Option for any reason expires or is
terminated or canceled or if shares of Stock are acquired upon the exercise of
an Option subject to a Company repurchase option and are repurchased by the
Company at the Optionee’s exercise price, the shares of Stock allocable to the
unexercised portion of such Option or such repurchased shares of Stock shall
again be available for issuance under the Plan.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.2          Adjustments for Changes in Capital
Structure.  Subject
to any required action by the shareholders of the Company, in the event of any
change in the Stock effected without receipt of consideration by the Company,
whether through merger, consolidation, reorganization, reincorporation,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares,
or similar change in the capital structure of the Company, or in the event of
payment of a dividend or distribution to the shareholders of the Company in a
form other than Stock (excepting normal cash dividends) that has a material
effect on the Fair Market Value of shares of Stock, appropriate and
proportionate adjustments shall be made in the number and class of shares
subject to the Plan and to any outstanding Options, in the ISO Share Issuance
Limit set forth in Section 4.1, and
in the exercise price per share of any outstanding Options.  If a
majority of the shares which are of the same class as the shares that are
subject to outstanding Options are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event, as defined in
Section 8.1)
shares of another corporation (the “New
Shares”),
the Board may unilaterally amend the outstanding Options to provide that such
Options are exercisable for New Shares.  In the event of any such
amendment, the number of shares subject to, and the exercise price per share of,
the outstanding Options shall be adjusted in a fair and equitable manner as
determined by the Board, in its discretion.  Notwithstanding the
foregoing, any fractional share resulting from an adjustment pursuant to this
Section 4.2
shall be rounded down to the nearest whole number, and in no event may the
exercise price of any Option be decreased to an amount less than the par value,
if any, of the stock subject to the Option.  The adjustments
determined by the Board pursuant to this Section 4.2
shall be final, binding and conclusive.

     

    5.    
       Eligibility and Option
Limitations.

     

    5.1          Persons Eligible for
Options.  Options
may be granted only to Employees, Consultants, and Directors, except for Options
granted in exchange for options issued under the IntelaSight, Inc. 2008 Stock
Option Plan, which may be issued to any person who, at the time of the initial
grant by IntelaSight, Inc., was eligible for the grant of an option under the
IntelaSight, Inc. 2008 Stock Option Plan.  For purposes of the
foregoing sentence, “Employees,” “Consultants” and “Directors” shall include
prospective Employees, prospective Consultants and prospective Directors to whom
Options are granted in connection with written offers of an employment or other
service relationship with the Participating Company Group.  Eligible
persons may be granted more than one (1) Option.  However, eligibility
in accordance with this Section shall not entitle any person to be granted an
Option, or, having been granted an Option, to be granted an additional
Option.

     

    5.2          Option Grant Restrictions.  Any
person who is not an Employee on the effective date of the grant of an Option to
such person may be granted only a Nonstatutory Stock Option.  An
Incentive Stock Option granted to a prospective Employee upon the condition that
such person become an Employee shall be deemed granted effective on the date
such person commences Service with a Participating Company, with an exercise
price determined as of such date in accordance with Section 6.1.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.3          Fair Market Value
Limitation.  To
the extent that options designated as Incentive Stock Options (granted under all
stock option plans of the Participating Company Group, including the Plan)
become exercisable by an Optionee for the first time during any calendar year
for stock having a Fair Market Value greater than One Hundred Thousand Dollars
($100,000.00), the portions of such options which exceed such amount shall be
treated as Nonstatutory Stock Options.  For purposes of this Section 5.3,
options designated as Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value of stock shall be
determined as of the time the option with respect to such stock is
granted.  If the Code is amended to provide for a different limitation
from that set forth in this Section 5.3,
such different limitation shall be deemed incorporated herein effective as of
the date and with respect to such Options as required or permitted by such
amendment to the Code.  If an Option is treated as an Incentive Stock
Option in part and as a Nonstatutory Stock Option in part by reason of the
limitation set forth in this Section 5.3, the
Optionee may designate which portion of such Option the Optionee is
exercising.  In the absence of such designation, the Optionee shall be
deemed to have exercised the Incentive Stock Option portion of the Option
first.  Separate certificates representing each such portion shall be
issued upon the exercise of the Option.

     

    6.       
    Terms and Conditions of
Options.

     

    Option
Agreements specifying the number of shares of Stock covered thereby, in such
form as the Board shall from time to time establish shall evidence
Options.  No Option or purported Option shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Option
Agreement.  Option Agreements may incorporate all or any of the terms
of the Plan by reference and shall comply with and be subject to the following
terms and conditions:

     

    6.1          Exercise Price.  The
exercise price for each Option shall be established in the discretion of the
Board, subject to compliance with Section 409A of the Code; provided, however,
that (a) the exercise price per share for an Incentive Stock Option shall
be not less than the Fair Market Value of a share of Stock on the effective date
of grant of the Option and (b) no Incentive Stock Option granted to a Ten
Percent Owner Optionee shall have an exercise price per share less than one
hundred ten percent (110%) of the Fair Market Value of a share of Stock on the
effective date of grant of the Option.  Notwithstanding the foregoing,
an Option may be granted with an exercise price lower than the Fair Market Value
of a share of stock on the effective date of the grant if the option is a
Nonstatutory Stock Option, and options granted in exchange for options issued
under the Intelasight, Inc. 2008 Stock Option Plan shall have the exercise price
specified on the options being exchanged.

     

    6.2          Exercisability and Term of
Options.  Options
shall be exercisable at such time or times, or upon such event or events, and
subject to such terms, conditions, performance criteria and restrictions as
shall be determined by the Board and set forth in the Option Agreement
evidencing such Option; provided, however, that (a) no Incentive Stock
Option shall be exercisable after the expiration of ten (10) years after the
effective date of grant of such Option, (b) no Incentive Stock Option
granted to a Ten Percent Owner Optionee shall be exercisable after the
expiration of five (5) years after the effective date of grant of such Option,
and (c) no Option granted to a prospective Employee, prospective Consultant
or prospective Director may become exercisable prior to the date on which such
person commences Service with a Participating Company.  Subject to the
foregoing, unless otherwise specified by the Board in the grant of an Option,
any Option granted hereunder shall terminate ten (10) years after the effective
date of grant of the Option, unless earlier terminated in accordance with its
provisions.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.3          Payment of Exercise
Price.

     

    (a)          Forms of
Consideration Authorized.  Except as otherwise provided below,
payment of the exercise price for the number of shares of Stock being purchased
pursuant to any Option shall be made (i) in cash, by check or cash
equivalent, (ii) by tender to the Company, or attestation to the ownership,
of shares of Stock owned by the Optionee having a Fair Market Value not less
than the exercise price, (iii) by delivery of a properly executed notice
together with irrevocable instructions to a broker providing for the assignment
to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without
limitation, through an exercise complying with the provisions of
Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System) (a “Cashless
Exercise”),
(iv) provided that the Optionee is an Employee (unless otherwise not
prohibited by law, including, without limitation, any regulation promulgated by
the Board of Governors of the Federal Reserve System) and in the Company’s sole
discretion at the time the Option is exercised, by delivery of the Optionee’s
promissory note in a form approved by the Company for the aggregate exercise
price, provided that, if the Company is incorporated in the State of Delaware,
the Optionee shall pay in cash that portion of the aggregate exercise price not
less than the par value of the shares being acquired, (v) by such other
consideration as may be approved by the Board from time to time to the extent
permitted by applicable law, or (vi) by any combination
thereof.  The Board may at any time or from time to time, by approval
of or by amendment to the standard forms of Option Agreement described in Section 7, or by
other means, grant Options which do not permit all of the foregoing forms of
consideration to be used in payment of the exercise price or which otherwise
restrict one or more forms of consideration.

     

    (b)          Limitations on
Forms of Consideration.

     

    (i)           Tender of
Stock.  Notwithstanding the foregoing, an Option may not be
exercised by tender to the Company, or attestation to the ownership, of shares
of Stock to the extent such tender or attestation would constitute a violation
of the provisions of any law, regulation or agreement restricting the redemption
of the Company’s stock.  Unless otherwise provided by the Board, an
Option may not be exercised by tender to the Company, or attestation to the
ownership, of shares of Stock unless such shares either have been owned by the
Optionee for more than six (6) months (and not used for another Option exercise
by attestation during such period) or were not acquired, directly or indirectly,
from the Company.

     

    (ii)           Cashless
Exercise.  The Company reserves, at any and all times, the
right, in the Company’s sole and absolute discretion, to establish, decline to
approve or terminate any program or procedures for the exercise of Options by
means of a Cashless Exercise.

     

    (iii)           Payment by Promissory
Note.  No promissory note shall be permitted if the exercise of
an Option using a promissory note would be a violation of any
law.  Any permitted promissory note shall be on such terms as the
Board shall determine.  The Board shall have the authority to permit
or require the Optionee to secure any promissory note used to exercise an Option
with the shares of Stock acquired upon the exercise of the Option or with other
collateral acceptable to the Company.  Unless otherwise provided by
the Board, if the Company at any time is subject to the regulations promulgated
by the Board of Governors of the Federal Reserve System or any other
governmental entity affecting the extension of credit in connection with the
Company’s securities, any promissory note shall comply with such applicable
regulations, and the Optionee shall pay the unpaid principal and accrued
interest, if any, to the extent necessary to comply with such applicable
regulations.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.4          Tax Withholding.  The
Company shall have the right, but not the obligation, to deduct from the shares
of Stock issuable upon the exercise of an Option, or to accept from the Optionee
the tender of, a number of whole shares of Stock having a Fair Market Value, as
determined by the Company, equal to all or any part of the federal, state, local
and foreign taxes, if any, required by law to be withheld by the Participating
Company Group with respect to such Option or the shares acquired upon the
exercise thereof.  Alternatively or in addition, in its discretion,
the Company shall have the right to require the Optionee, through payroll
withholding, cash payment or otherwise, including by means of a Cashless
Exercise, to make adequate provision for any such tax withholding obligations of
the Participating Company Group arising in connection with the Option or the
shares acquired upon the exercise thereof.  The Fair Market Value of
any shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.  The Company shall have no obligation to
deliver shares of Stock or to release shares of Stock from an escrow established
pursuant to the Option Agreement until the Optionee has satisfied the
Participating Company Group’s tax withholding obligations.

     

    6.5          Repurchase Rights.  Shares
issued under the Plan may be subject to a right of first refusal, one or more
repurchase options, or other conditions and restrictions as determined by the
Board in its discretion at the time the Option is granted.  The
Company shall have the right to assign at any time any repurchase right it may
have, whether or not such right is then exercisable, to one or more persons as
may be selected by the Company.  Upon request by the Company, each
Optionee shall execute any agreement evidencing such transfer restrictions prior
to the receipt of shares of Stock hereunder and shall promptly present to the
Company any and all certificates representing shares of Stock acquired hereunder
for the placement on such certificates of appropriate legends evidencing any
such transfer restrictions.

     

    6.6          Effect of Termination of
Service.

     

    (a)          Option
Exercisability.  Subject to
earlier termination of the Option as otherwise provided herein and unless
otherwise provided by the Board in the grant of an Option and set forth in the
Option Agreement, an Option shall be exercisable after an Optionee’s termination
of Service only during the applicable time period determined in accordance with
this Section 6.6 and thereafter shall terminate:

     

    (i)           Disability.  If the
Optionee’s Service terminates because of the Disability of the Optionee, the
Option, to the extent unexercised and exercisable on the date on which the
Optionee’s Service terminated, may be exercised by the Optionee (or the
Optionee’s guardian or legal representative) at any time prior to the expiration
of twelve (12) months (or such longer period of time as determined by the Board,
in its discretion) after the date on which the Optionee’s Service terminated,
but in any event no later than the date of expiration of the Option’s term as
set forth in the Option Agreement evidencing such Option (the “Option Expiration
Date”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (ii)           Death.  If the
Optionee’s Service terminates because of the death of the Optionee, the Option,
to the extent unexercised and exercisable on the date on which the Optionee’s
Service terminated, may be exercised by the Optionee’s legal representative or
other person who acquired the right to exercise the Option by reason of the
Optionee’s death at any time prior to the expiration of twelve (12) months (or
such longer period of time as determined by the Board, in its discretion) after
the date on which the Optionee’s Service terminated, but in any event no later
than the Option Expiration Date.  The Optionee’s Service shall be
deemed to have terminated on account of death if the Optionee dies within three
(3) months (or such longer period of time as determined by the Board, in its
discretion) after the Optionee’s termination of Service.

     

    (iii)           Termination for
Cause.  Notwithstanding any other provision of this Option
Agreement, if the Optionee’s Service is terminated for Cause, the Option shall
terminate and cease to be exercisable on the effective date of such termination
of Service.  Unless otherwise defined in a contract of employment or
service between the Optionee and a Participating Company, for purposes of this
Option Agreement “Cause” shall mean any of the
following: (1) the Optionee’s theft, dishonesty, willful misconduct, breach
of fiduciary duty for personal profit, or falsification of any Participating
Company documents or records; (2) the Optionee’s material failure to abide
by a Participating Company’s code of conduct or other policies (including,
without limitation, policies relating to confidentiality and reasonable
workplace conduct); (3) the Optionee’s unauthorized use, misappropriation,
destruction, or diversion of any tangible or intangible asset or corporate
opportunity of a Participating Company (including, without limitation, the
Optionee’s improper use or disclosure of a Participating Company’s confidential
or proprietary information); (4) any intentional act by the Optionee which
has a material detrimental effect on a Participating Company’s reputation or
business; (5) the Optionee’s failure or inability to perform any reasonable
assigned duties after written notice from a Participating Company of, and a
reasonable opportunity to cure, such failure or inability; (6) any material
breach by the Optionee of any employment or service agreement between the
Optionee and a Participating Company, which breach is not cured pursuant to the
terms of such agreement; or (7) the Optionee’s conviction (including any
plea of guilty or nolo contendere) of any criminal act involving fraud,
dishonesty, misappropriation, or moral turpitude, or which impairs the
Optionee’s ability to perform his or her duties with a Participating
Company.

     

    (iv)           Other Termination of
Service.  If the Optionee’s Service terminates for any reason,
except Disability, death or Cause, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee’s Service
terminated, may be exercised by the Optionee at any time prior to the expiration
of three (3) months (or such longer period of time as determined by the Board,
in its discretion) after the date on which the Optionee’s Service terminated,
but in any event no later than the Option Expiration Date.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)          Extension if
Exercise Prevented by Law.  Notwithstanding
the foregoing (except Termination for Cause), if the exercise of an Option
within the applicable time periods set forth in Section 6.6(a) is prevented
by the provisions of Section 9 below, the Option shall remain exercisable
until three (3) months (or such longer period of time as determined by the
Board, in its discretion) after the date the Optionee is notified by the Company
that the Option is exercisable, but in any event no later than the Option
Expiration Date.

     

    (c)          Extension if
Optionee Subject to Section 16(b).  Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section 6.6(a)
of shares acquired upon the exercise of the Option would subject the Optionee to
suit under Section 16(b) of the Exchange Act, the Option shall remain
exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th)
day after the Optionee’s termination of Service, or (iii) the Option
Expiration Date.

     

    6.7          Transferability of
Options.  During the lifetime of the Optionee, an Option shall
be exercisable only by the Optionee or the Optionee’s guardian or legal
representative.  No Option shall be assignable or transferable by the
Optionee, except by will or by the laws of descent and
distribution.  Notwithstanding the foregoing, to the extent permitted
by the Board, in its discretion, and set forth in the Option Agreement
evidencing such Option, a Nonstatutory Stock Option shall be assignable or
transferable subject to Rule 701 under the Securities Act and the General
Instructions to Form S-8 Registration Statement under the Securities
Act.

     

    7.       
    Standard Forms of Option
Agreement.

     

    7.1          Option Agreement.  Unless
otherwise provided by the Board at the time the Option is granted, an Option
shall comply with and be subject to the terms and conditions set forth in the
form of Option Agreement approved by the Board concurrently with its adoption of
the Plan and as amended from time to time.

     

    7.2          Authority to Vary Terms.  The
Board shall have the authority from time to time to vary the terms of any
standard form of Option Agreement described in this Section 7 either
in connection with the grant or amendment of an individual Option or in
connection with the authorization of a new standard form or forms; provided,
however, that the terms and conditions of any such new, revised or amended
standard form or forms of Option Agreement are not inconsistent with the terms
of the Plan.

     

    8.       
    Change in
Control.

     

    8.1          Definitions.

     

    (a)          An
“Ownership Change
Event”
shall be deemed to have occurred if any of the following occurs with respect to
the Company:  (i) the direct or indirect sale or exchange in a single
or series of related transactions by the shareholders of the Company of more
than fifty percent (50%) of the voting stock of the Company; (ii) a merger or
consolidation in which the Company is a party; (iii) the sale, exchange, or
transfer of all or substantially all of the assets of the Company; or (iv) a
liquidation or dissolution of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)          A
“Change in
Control”
shall mean an Ownership Change Event or a series of related Ownership Change
Events (collectively, a “Transaction”)
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting securities of the Company or, in the case of a Transaction
described in Section 8.1(a)(iii), the corporation or other business entity to
which the assets of the Company were transferred (the “Transferee”),
as the case may be.  For purposes of the preceding sentence, indirect
beneficial ownership shall include, without limitation, an interest resulting
from ownership of the voting securities of one or more corporations or other
business entities which own the Company or the Transferee, as the case may be,
either directly or through one or more subsidiary corporations or other business
entities.  The Board shall have the right to determine whether
multiple sales or exchanges of the voting securities of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

     

    8.2          Effect of Change in Control on
Options.

     

    (a)          In
the event of a Change in Control, the surviving, continuing, successor, or
purchasing corporation or other business entity or parent thereof, as the case
may be (the “Acquiror”),
may, without the consent of the Optionee, either assume the Company’s rights and
obligations under outstanding Options or substitute for outstanding Options
substantially equivalent options for the Acquiror’s stock.  Any
Options which are neither assumed or substituted for by the Acquiror in
connection with the Change in Control nor exercised as of the date of the Change
in Control shall terminate and cease to be outstanding effective as of the date
of the Change in Control, provided, that, notwithstanding
any other provision of the Plan to the contrary, the Board may, in its sole
discretion, provide in any Option Agreement or, in the event of a Change in
Control, may take such actions as it deems appropriate, to provide for the
acceleration of the exercisability and vesting in connection with such Change in
Control of any or all of the outstanding Options and any shares acquired upon
the exercise of such Options, subject to compliance with Section 409A of the
Code.  Notwithstanding the foregoing, shares acquired upon exercise of
an Option prior to the Change in Control and any consideration received pursuant
to the Change in Control with respect to such shares shall continue to be
subject to all applicable provisions of the Option Agreement evidencing such
Option except as otherwise provided in such Option
Agreement.  Furthermore, notwithstanding the foregoing, if the
corporation the stock of which is subject to the outstanding Options immediately
prior to an Ownership Change Event described in Section 8.1(a)(i)
constituting a Change in Control is the surviving or continuing corporation and
immediately after such Ownership Change Event less than fifty percent (50%) of
the total combined voting power of its voting stock is held by another
corporation or by other corporations that are members of an affiliated group
within the meaning of Section 1504(a) of the Code without regard to the
provisions of Section 1504(b) of the Code, the outstanding Options shall
not terminate unless the Board otherwise provides in its
discretion.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)          The
Board may, in its sole discretion and without the consent of any Optionee,
determine that, upon the occurrence of a Change in Control, each or any Option
outstanding immediately prior to the Change in Control shall be canceled in
exchange for a payment with respect to each vested share of Stock subject to
such canceled Option in (i) cash, (ii) stock of the Company, the Acquiror or of
a corporation or other business entity a party to the Change in Control, or
(iii) other property which, in any such case, shall be in an amount having a
Fair Market Value equal to the excess of the Fair Market Value of the
consideration to be paid per share of Stock in the Change in Control over the
exercise price per share under the Option (the “Spread”).  In
the event such determination is made by the Board, the Spread (reduced by
applicable withholding taxes, if any) shall be paid to Optionees in respect of
their canceled Options as soon as practicable following the date of the Change
in Control.

     

    9.      
     Compliance with Securities
Law.

     

    The grant
of Options and the issuance of shares of Stock upon exercise of Options shall be
subject to compliance with all applicable requirements of federal, state and
foreign law with respect to such securities.  Options may not be
exercised if the issuance of shares of Stock upon exercise would constitute a
violation of any applicable federal, state or foreign securities laws or other
law or regulations or the requirements of any stock exchange or market system
upon which the Stock may then be listed.  In addition, no Option may
be exercised unless (a) a registration statement under the Securities Act
shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (b) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  The inability of the
Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful
issuance and sale of any shares hereunder shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.  As a condition
to the exercise of any Option, the Company may require the Optionee to satisfy
any qualifications that may be necessary or appropriate, to evidence compliance
with any applicable law or regulation and to make any representation or warranty
with respect thereto as may be requested by the Company.

     

    10.    
     Termination or Amendment of
Plan.

     

    The Board
may terminate or amend the Plan at any time.  No termination or
amendment of the Plan shall affect any then outstanding Option unless expressly
provided by the Board.  In any event, no termination or amendment of
the Plan may adversely affect any then outstanding Option without the consent of
the Optionee, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or
rule.

     

    IN
WITNESS WHEREOF, the undersigned Secretary of the Company certifies that the
foregoing sets forth the Iveda Corporation 2009 Stock Option Plan as duly
adopted by the Board on October 15, 2009.

    


    
      
        
          	
                  /s/ Kevin Liggins

                
	
                  Kevin
      Liggins, Secretary