2006 Amended and Restated Stock Option and Incentive Plan


    Exhibit
      4.1

    NIC
      INC. 2006 AMENDED AND
      RESTATED

    STOCK
      OPTION AND INCENTIVE
      PLAN

     

    Adopted
      by the Compensation
      Committee: January 19, 2006

     

    Adopted
      by the Stockholders: May 2,
      2006

     

    ARTICLE
      I. 
PURPOSE.

     

               
      A.           
The purpose of the Plan is to provide a means by which
      selected
      Employees, Directors and Consultants of the Company, and its Affiliates, if
      any,
      may be given an opportunity to benefit from increases in value of the Common
      Stock of the Company through the grant of Options, Restricted Stock Awards
      or
      both.

     

               
      B.           
The Company, by means of the Plan, seeks to retain
      the services of
      persons who are now Employees or Directors of or Consultants to the Company
      or
      its Affiliates, to secure and retain the services of new Employees, Directors
      and Consultants, and to provide incentives for such persons to exert maximum
      efforts for the success of the Company and its Affiliates.

     

               
      C.           
All Options granted under the Plan shall be separately
      designated as
      Incentive Stock Options or Non-Qualified Stock Options at the time of grant,
      and
      in such form as issued pursuant to Article VI, and a separate certificate or
      certificates will be issued for shares purchased on exercise of each type of
      Option or granted pursuant to a Restricted Stock Award, which shall also be
      in
      such form as issued pursuant to Article VIII.

     

               
      D.           
The Plan is a 2006 amendment and restatement
      of the National Information
      Consortium, Inc. 1998 Stock Option Plan, as adopted effective May 5, 1998 and
      amended November 3, 1998 and May 4, 1999, revised as of August 31, 1999 and
      amended and restated as of May 4, 2004.  Any option granted under the
      National Information Consortium, Inc. 1998 Stock Option Plan prior to the Plan’s
      effective date, as provided in Article XV, shall be subject to the terms of
      the
      National Information Consortium, Inc. 1998 Stock Option Plan as they existed
      immediately prior to that effective date.

     

    ARTICLE
      II. 
DEFINITIONS.

     

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

     

               
      “Affiliate” means any parent corporation or subsidiary
      corporation of the Company, whether now or hereafter existing, as those terms
      are defined in Sections 424(e) and (f) respectively, of the Code.

     

               
      “Award” means either an Option or a Restricted Stock
      Award.

     

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

     

               
      “Code” means the Internal Revenue Code of 1986, as amended, and
      any Internal Revenue Code adopted in the future to replace the Internal Revenue
      Code of 1986.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


               
“Committee”
      means the Committee of Outside Directors
      appointed by the Board in accordance with subsection C of Article III to
      administer the Plan.  For any purposes under this Plan, the Committee may
      be the Compensation Committee of the Company's Board.

     

               
      “Common Stock” means shares of the Company’s common stock, no
      par value.

     

               
      “Company” means NIC Inc., a Colorado corporation.

     

               
      “Consultant” means any person, including an advisor, engaged by
      the Company or an Affiliate to render consulting services as an independent
      contractor and who is compensated for such services, provided that the term
      “Consultant” shall not include Directors who are paid only a director’s fee by
      the Company or who are not compensated by the Company for their services as
      Directors.

     

               
      “Continuous Status as an Employee, Director or Consultant”
      means that the provision of services to the Company or an Affiliate in any
      capacity of Employee, Director or Consultant, is not interrupted or
      terminated.  Continuous Status as an Employee, Director or Consultant shall
      not be considered interrupted in the case of (i) any approved leave of absence,
      (ii) transfers between locations of the Company or among the Company, any
      Affiliate, or any successor, in any capacity of Employee, Director or
      Consultant, or (iii) any change in status as long as the person remains in
      the
      service of the Company, Affiliate or successor in any capacity of Employee,
      Director or Consultant (except as otherwise provided in the Option
      Agreement).  An approved leave of absence shall include sick leave,
      military leave, or any other authorized personal leave approved by the Company;
      provided, however, that any such authorized leave of absence shall be treated
      as
      Continuous Status as an Employee, Director or Consultant for the purposes of
      vesting only to the extent as may be provided in the Company’s leave
      policy.  For purposes of Incentive Stock Options, no such leave may exceed
      ninety (90) days, unless reemployment upon expiration of such leave is
      guaranteed by statute or contract.  The Board, in its sole discretion,
      shall in all cases determine whether Continuous Status as an Employee, Director
      or Consultant shall be considered interrupted or terminated.

     

               
      “Covered Employee” means any person who, on the last day of the
      taxable year, is the chief executive officer (or is acting in such capacity)
      or
      is among the four most highly compensated officers (other than the chief
      executive officer) of the Company for whom total compensation is required to
      be
      reported to stockholders under the Exchange Act, as determined for purposes
      of
      Section 162(m) of the Code.

     

               
      “Director” means a member of the Board or of the board of
      directors of an Affiliate.

     

               
      “Employee” means any person, including Officers and Directors,
      employed by the Company or any Affiliate of the Company as determined under
      the
      rules contained in Code Section 3401.  Neither service as a Director nor
      payment of a director’s fee by the Company shall be sufficient by itself to
      constitute “employment” by the Company.

     

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

    


               
“Fair
      Market
      Value” means, as of any date, the value of the Common Stock of
      the Company determined as follows:

    


    
      
        
        

      

      
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    (i)         
If
      the Common
      Stock is readily tradable on an established securities market, the fair market
      value of the Common Stock on the date of grant means the value determined based
      upon the last sale before or the first sale after the grant, the closing price
      on the trading day before or the trading day of the grant of the Award, or
      any
      other reasonable basis using actual transactions in the Common Stock as reported
      by such market and consistently applied. 

     

    (ii)        
If
      the Common Stock
      is not readily tradable on an established securities market, the fair market
      value of the Common Stock on the date of grant means the value determined by
      a
      valuation of the Common Stock determined by an independent appraisal that meets
      the requirements of Section 401(a)(28)(C) of the Code and the regulations
      thereunder as of a date that is no more than 12 months before the relevant
      Option grant date.

     

               
      “Incentive Stock Option” means an Option intended to qualify as
      an incentive stock option (as set forth in the Option Agreement) and that
      qualifies as an Incentive Stock Option within the meaning of Section 422 of
      the
      Code and the regulations promulgated thereunder.

     

               
      “Non-Qualified Stock Option” means an Option not intended to
      qualify as an Incentive Stock Option (as set forth in the Option Agreement)
      or
      that does not qualify as an Incentive Stock Option.

     

               
      “Officer” means a person who is an officer of the Company
      within the meaning of Section 16 of the Exchange Act and the rules and
      regulations promulgated thereunder.

     

               
      “Option” means a stock option granted pursuant to the
      Plan.

     

               
      “Option Agreement” means a written agreement between the
      Company and a Recipient evidencing the terms and conditions of an individual
      Option grant.  Each Option Agreement shall be subject to the terms and
      conditions of the Plan.

     

               
      “Outside Director” means a Director who (i) is not a current
      employee of the Company or an “affiliated corporation” (within the meaning of
      Treasury regulations promulgated under Section 162(m) of the Code), (ii) is
      not
      a former employee of the Company or an “affiliated corporation” receiving
      compensation for prior services (other than benefits under a tax qualified
      pension plan) during the taxable year, (iii) has not been an officer of the
      Company or an “affiliated corporation” at any time, (iv) is not currently
      receiving direct or indirect remuneration (including any payment in exchange
      for
      goods or services) from the Company or an “affiliated corporation” in any
      capacity other than as a Director, (v) is otherwise considered an “outside
      director” for purposes of Section 162(m) of the Code, a “non-employee director”
for purposes of Rule 16b-3 under the Exchange Act and an "independent director"
      for purposes of Rule 4350 of the National Association of Securities Dealers,
      Inc.

     

               
      “Plan” means this NIC Inc. 2006 Amended and Restated Stock
      Option and Incentive Plan.

     

               
      “Purchase Price” is defined in Subsection C of Article
      VI.

    


    
      
        
        

      

      
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“Recipient”
      means an Employee, Director or Consultant, or
      their transferees, who holds an outstanding Option or Restricted Stock
      Award.

     

               
      “Restricted Stock” means Common Stock awarded to an Employee
      pursuant to Article VIII that is subject to certain restrictions and a
      substantial risk of forfeiture.

     

               
      “Restricted Stock Agreement” means a written agreement between
      the Company and a Recipient evidencing the terms, conditions and restrictions
      of
      an individual Restricted Stock Award.  Each Restricted Stock Agreement
      shall be subject to the terms and conditions of the Plan.

     

               
      “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any
      successor to Rule 16b-3, as in effect when discretion is being exercised with
      respect to the Plan.

     

    ARTICLE
      III. 
ADMINISTRATION.

     

               
      A.           
The Plan shall be administered by the Board unless
      and until the Board
      delegates administration to the Committee, as provided in subsection C of this
      Article III.

     

               
      B.           
The Board shall have the power, subject to, and within
      the limitations
      of, the express provisions of the Plan:

     

    (i)           
To
      determine, in its sole discretion, from time to time which of the persons
      eligible under the Plan shall be granted an Award; when and how each Award
      shall
      be granted; whether an Option granted will be an Incentive Stock Option or
      a
      Non-Qualified Stock Option, or a combination of the foregoing; the provisions
      of
      each Award granted (which need not be identical), including the time or times
      when a person shall be permitted to receive stock pursuant to an Award; the
      number of shares with respect to which an Award shall be granted to each such
      person; and all other terms, conditions and restrictions applicable to each
      such
      Award or shares acquired upon exercise of an Option not inconsistent with the
      terms of the Plan.

     

    (ii)           
To
      approve one or more forms of Option Agreement and Restricted Stock
      Agreement.

     

    (iii)           
      To construe and interpret, in its sole discretion, the Plan and Awards granted
      under it, and to establish, amend and revoke rules and regulations for its
      administration.  The Board, in the exercise of this power, may correct any
      defect, omission or inconsistency in the Plan or in any Option Agreement, in
      a
      manner and to the extent it shall deem necessary or expedient to make the Plan
      fully effective.

     

    (iv)           
To
      amend, modify or otherwise change in any manner the Plan or an Award as provided
      in Article XIII and to suspend or terminate the Plan as provided in Article
      XIV.

    


    (v)           
      Generally, to exercise such powers and to perform such acts as the Board deems
      necessary or expedient to promote the best interests of the Company that are
      not
      in conflict with the provisions of the Plan.

    


    
      
        
        

      

      
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All
      decisions, determinations
      and interpretations of the Board shall be final, binding and conclusive on
      any
      Recipient and any other person with an interest in the Plan or in an Award
      and
      on any Affiliate.

     

               
      C.           
The Board may delegate administration of the Plan to a committee
      composed
      of not fewer than two (2) of its members, all of the members of which Committee
      shall be Outside Directors.  The Committee may be the Board's Compensation
      Committee.  Furthermore, notwithstanding anything in this Article III to
      the contrary, the Board shall delegate administration of the Plan to the
      Committee for any grant of an Award to an eligible person who is a Covered
      Employee or who is expected to be a Covered Employee at the time of recognition
      of income resulting from such Award with respect to either of whom the Company
      wishes to avoid the application of Section 162(m) of the Code.

     

               
      Notwithstanding anything in this Article III to the contrary, at any time the
      Board or the Committee may delegate to a committee of one or more members of
      the
      Board the authority to grant Awards to eligible persons who (i) are not then
      subject to Section 16 of the Exchange Act and (ii) are either (A) not then
      Covered Employees and are not expected to be Covered Employees at the time
      of
      recognition of income resulting from such Award, or (B) not persons with respect
      to whom the Company wishes to avoid the application of Section 162(m) of the
      Code.

     

               
In
      the
      event that any administration of the Plan is delegated to the Committee under
      this Article III, the Committee shall have, during such delegation and in
      connection with the administration of the Plan, the powers theretofore possessed
      by the Board (and references in this Plan to the Board shall thereafter be
      to
      the committee), subject, however, to such resolutions, not inconsistent with
      the
      provisions of the Plan, as may be adopted from time to time by the Board. 
The Board may abolish the Committee at any time and, upon abolition
      administration of the Plan shall revert automatically, without any further
      action on the Board's part, to the Board.

     

               
      D.           
Notwithstanding anything in this Article III to the
      contrary, at any time
      the Board may also delegate to any proper Officer the authority to grant Awards,
      without further approval of the Board, to eligible persons who (i) are not
      then
      subject to Section 16 of the Exchange Act and (ii) are either (A) not then
      Covered Employees and are not expected to be Covered Employees at the time
      of
      recognition of income resulting from such Award, or (B) not persons with respect
      to whom the Company wishes to avoid the application of Section 162(m) of the
      Code; provided, however, that (i) the exercise price per share of each Option
      Award shall be equal to the Fair Market Value of such stock at the date of
      grant, and (ii) each Option Award shall be subject to the terms and conditions
      of the standard form of Option Agreement approved by the Board and shall conform
      to the provisions of the Plan and such other guidelines as shall be established
      from time to time by the Board.

     

               
      E.           
No member of the Board or of any committee constituted
      under this Article
      III or any Officer acting pursuant to this Article shall be personally liable
      for any action, determination or interpretation made in good faith with respect
      to the Plan or any Award.

    


    
      
        
        

      

      
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    ARTICLE
      IV.  SHARES SUBJECT TO
      THE PLAN.

     

               
      A.           
Subject to the provisions of Article XII relating
      to adjustments upon
      changes in stock, the amount of stock that may be issued pursuant to Awards
      shall not exceed in the aggregate nine million two hundred eighty-six thousand
      seven hundred fifty-four (9,286,754) shares of the Common Stock.  If any
      Award shall for any reason expire or otherwise terminate, in whole or in part,
      without having been exercised in full, the shares not acquired underlying such
      Award shall revert to and again become available for issuance under the
      Plan. 

     

               
      B.           
The Common Stock subject to the Plan may be unissued shares
      or reacquired
      shares, bought on the market or otherwise.

     

    ARTICLE
      V. 
ELIGIBILITY.

     

               
      A.           
Incentive Stock Options may be granted only to Employees. 
Non-Qualified Stock Options and Restricted Stock may
      be granted only to
      Employees, Directors or Consultants. 

     

               
      B.           
No person shall be eligible for the grant of an Incentive Stock
      Option
      if, at the time of grant, such person owns (or is deemed to own pursuant to
      Section 424(d) of the Code) stock representing more than ten percent (10%)
      of
      the total combined voting power of all classes of stock of the Company, or
      of
      any of its Affiliates (a “Ten Percent Stockholder”), unless the exercise price
      of such Option is at least one hundred ten percent (110%) of the Fair Market
      Value of such stock at the date of grant and the Option is not exercisable
      after
      the expiration of five (5) years from the date of grant.

     

               
      C.           
To the extent that the aggregate Fair Market Value (determined
      at the
      time of grant) of stock with respect to which Incentive Stock Options are
      exercisable for the first time by any Recipient during any calendar year under
      all plans of the Company and its Affiliates exceeds one hundred thousand dollars
      ($100,000), the Options or portions thereof which exceed such limit (according
      to the order in which they were granted) shall be treated as Non-Qualified
      Stock
      Options.

     

               
      D.           
Subject to the provisions of Article XII relating to adjustments
      upon
      changes in stock, no person shall be eligible to be granted Awards covering
      more
      than two hundred thousand (200,000)  shares of the Common Stock in any
      calendar year.

     

    ARTICLE
      VI.  TERMS OF
      OPTIONS.

     

               
Each
      Option shall be evidenced by an Option Agreement in such form and shall contain
      such terms and conditions as the Board shall deem appropriate.   No
      Option or purported Option shall be a valid and binding obligation of the
      Company unless evidenced by a fully executed Option Agreement or by
      communicating with the Company in such manner as the Company may
      authorize.  The provisions of separate Options need not be identical, but
      each Option shall include (through incorporation of provisions hereof or as
      specifically set forth in the Option Agreement or otherwise) the substance
      of
      each of the following provisions:

    


               
A.           
      Term.  No Incentive Stock Option shall be
      exercisable after the expiration of ten (10) years from the date it was
      granted.  However, in the case of an Incentive Stock Option granted to a
      Recipient who, at the time the Option is granted, is a Ten Percent Stockholder
      (as

    


    
      
        
        

      

      
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    described
      in subsection B of Article V), the term of the Option shall be
      five (5) years from the date of grant thereof or such shorter term as may be
      provided in the Option Agreement.

     

               
      B.           
Price.  The exercise price of each Option shall be
      not less than one hundred percent (100%) of the Fair Market Value of the stock
      subject to the Option on the date the Option is granted.  Notwithstanding
      the foregoing, an Option (whether an Incentive Stock Option or a Non-Qualified
      Stock Option) may be granted with an exercise price lower than that set forth
      in
      the preceding sentence if such Option is granted pursuant to an assumption
      or
      substitution for another option in a manner satisfying the provisions of Section
      424(a) of the Code.

     

               
      C.           
Consideration.  The purchase price of stock
      acquired pursuant to an Option (the “Purchase Price”) shall be
      paid, to the extent permitted by applicable statutes and regulations, either
      (i)
      in cash or check at the time the Option is exercised, or (ii) as set forth
      in
      the Option Agreement (or in the case of a Non-Qualified Stock Option, as
      subsequently determined in the discretion of the Board or the Committee) (A)
      in
      shares of Common Stock duly endorsed over to the Company (which shares shall
      have been owned by the Option holder for at least six (6) months prior to such
      exercise and, for purposes of this paragraph, be valued at their Fair Market
      Value as of the business day immediately preceding the date of such exercise),
      (B) by written direction to an authorized broker to sell the shares of Common
      Stock purchased pursuant to such exercise immediately for the account of the
      Option holder and pay an appropriate portion of the proceeds thereof to the
      Company, (C) according to a deferred payment or other arrangement (which may
      include, without limiting the generality of the foregoing, the use of other
      Common Stock of the Company) with the Recipient in any other form of legal
      consideration that may be acceptable to the Board, or (D) any combination of
      such methods of payment which together amount to the full exercise price of
      the
      shares purchased pursuant to the exercise of the Option.  For purposes of
      this subsection C, the Purchase Price shall include the amount of the full
      exercise price of the Common Stock shares purchased pursuant to the exercise
      of
      the Option plus the minimum amount, if any, of any applicable taxes which the
      Company is required to withhold.

     

               
In
      the
      case of any deferred payment arrangement, interest shall be payable at least
      annually and shall be charged at the minimum rate of interest necessary to
      avoid
      the treatment as interest, under any applicable provisions of the Code, of
      any
      amounts other than amounts stated to be interest under the deferred payment
      arrangement.  No deferred payment arrangement shall be permitted if the
      exercise of an Option for such a deferred payment would be a violation of any
      law or cause the Plan to be deemed a "nonqualified deferred compensation plan",
      as defined in Section 409A of the Code.

     

               
      D.           
Transferability.  An Incentive Stock Option shall
      not be transferable except by will or by the laws of descent and distribution,
      and shall be exercisable during the lifetime of the Recipient only by such
      Recipient or by his attorney-in-fact or conservator, unless such exercise by
      the
      attorney-in-fact or the conservator of the Recipient would disqualify the
      Incentive Stock Option as such.  Unless the Board otherwise specifies, a
      Non-Qualified Stock Option shall not be transferable except by will or by the
      laws of descent and distribution and shall be exercisable during the lifetime
      of
      the Recipient only by such person or by his attorney-in-fact or
      conservator.  Notwithstanding the foregoing, the Recipient may, by
      delivering written notice to the Company, in a form satisfactory to the Company,
      designate a third party who, in the event of the death of the Recipient, shall
      thereafter be entitled to exercise the Option.

    


    
      
        
        

      

      
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E.           
      Vesting.  The total number of shares of stock
      subject to an Option may, but need not, be allotted in periodic installments
      (which may, but need not, be equal).  The Option Agreement may provide that
      from time to time during each of such installment periods, the Option may become
      exercisable (“vest”) with respect to some or all of the shares allotted to that
      period, and may be exercised with respect to some or all of the shares allotted
      to such period and/or any prior period as to which the Option became vested
      but
      was not fully exercised.  The Option may be subject to such other terms and
      conditions on the time or times when it may be exercised (which may be based
      on
      performance or other criteria) as the Board may deem appropriate.  Unless
      otherwise specified in an Option Agreement, the shares of stock underlying
      an
      Option grant shall vest in four equal amounts: the first installment will be
      first exercisable on the six (6)-month anniversary of the option grant date
      and
      each succeeding installment will be first exercisable one (1) year from the
      date
      that the immediately preceding installment became exercisable.  Any vesting
      schedule can be accelerated in the discretion of the Board, unless otherwise
      specified in the Option Agreement.

     

               
      F.           
Termination of Employment or Relationship
      as a Director or
      Consultant.  In the event a Recipient’s Continuous Status as an
      Employee, Director or Consultant terminates (other than upon the Recipient’s
      death or disability), the Recipient may exercise his or her Option (to the
      extent that the Recipient was entitled to exercise it at the date of
      termination) but only within such period of time ending on the earlier of (i)
      the date three (3) months after the termination of the Recipient’s Continuous
      Status as an Employee, Director or Consultant (or, such longer or shorter period
      specified in the Option Agreement), or (ii) the expiration of the term of the
      Option as set forth in the Option Agreement.  If, at the date of
      termination, the Recipient is not entitled to exercise his or her entire Option,
      the shares covered by the unexercisable portion of the Option shall revert
      to
      and again become available for issuance under the Plan.  If, after
      termination, the Recipient does not exercise his or her Option within the time
      specified in the Option Agreement or in this Plan, the Option shall terminate,
      and the shares covered by such Option shall revert to and again become available
      for issuance under the Plan.  The above terms shall apply only if the
      specific Option grant is silent on the above issues; however, a specific Option
      grant may provide for different terms in the event a Recipient’s Continuous
      Status as an Employee, Director or Consultant terminates (other than upon the
      Recipient’s death or disability).

     

               
      G.           
Disability of Recipient.  In the event a
      Recipient’s Continuous Status as an Employee, Director or Consultant terminates
      as a result of the Recipient’s disability, as defined in Section 22(e)(3) of the
      Code, the Recipient may exercise his or her Option (to the extent that the
      Recipient was entitled to exercise it at the date of termination), but only
      within such period of time ending on the earlier of (i) the date twelve (12)
      months following such termination (or, such longer or shorter period specified
      in the Option Agreement), or (ii) the expiration of the term of the Option
      as
      set forth in the Option Agreement.  If, at the date of termination of
      Continuous Status, the Recipient is not entitled to exercise his or her entire
      Option, the shares covered by the unexercisable portion of the Option shall
      revert to and again become available for issuance under the Plan.  If,
      after termination, the Recipient does not exercise his or her Option within
      the
      time specified herein, the Option shall terminate, and the shares covered by
      such Option shall revert to and again become available for issuance under the
      Plan.  The above terms shall apply only if the specific Option grant is
      silent on the above issues; however, a specific Option grant may provide for different terms in
      the event a
      Recipient’s Continuous Status as an Employee, Director or Consultant terminates
      as a result of the Recipient’s disability.

     

    
      
        
        

      

      
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H.           
      Death of Recipient.  In the event of the death of a
      Recipient during, or within a period specified in the Option after the
      termination of, the Recipient’s Continuous Status as an Employee, Director or
      Consultant, the Option may be exercised (to the extent the Recipient was
      entitled to exercise the Option at the date of death) by the Recipient’s estate,
      by a person who acquired the right to exercise the Option by bequest or
      inheritance or by a person designated to exercise the option upon the
      Recipient’s death pursuant to subsection D of Article VI, but only within the
      period ending on the earlier of (i) the date twelve (12) months following the
      date of death (or, such longer or shorter period specified in the Option
      Agreement), or (ii) the expiration of the term of such Option as set forth
      in
      the Option Agreement.  If, at the time of death, the Recipient was not
      entitled to exercise his or her entire Option, the shares covered by the
      unexercisable portion of the Option shall revert to and again become available
      for issuance under the Plan.  If, after death, the Option is not exercised
      within the time specified herein, the Option shall terminate, and the shares
      covered by such Option shall revert to and again become available for issuance
      under the Plan. The above terms shall apply only if the specific Option grant
      is
      silent on the above issues; however, a specific Option grant may provide for
      different terms in the event a Recipient’s Continuous Status as an Employee,
      Director or Consultant terminates as a result of the Recipient’s death.

     

               
      I.           
Responsibility for Option Exercise.  A Recipient is
      responsible for taking any and all actions as may be required to exercise any
      Option in a timely manner, and for properly executing any documents as may
      be
      required for the exercise of an Option in accordance with such rules and
      procedures as may be established from time to time under the Plan.  By
      signing or accepting an Option Agreement a Recipient (and any person to whom
      the
      Option under that Option Agreement is transferred) acknowledges that information
      regarding the procedures and requirements for the exercise of that Option is
      available upon such Recipient’s or person’s request to the Board.  The
      Company shall have no duty or obligation to notify any Recipient of the
      expiration of any Option.

     

    ARTICLE
      VII.  REPRICING,
      CANCELLATION AND RE-GRANT
OF OPTIONS.

     

               
The
      Board or the Committee shall not effect at any time directly or indirectly
      the
      repricing of any outstanding Options, including without limitation a repricing
      by the cancellation of any outstanding Options under the Plan and the grant
      in
      substitution therefor of new Options under the Plan covering the same or
      different amount of shares of stock.  Notwithstanding the foregoing, an
      Option (whether an Incentive Stock Option or a Non-Qualified Stock Option)
      may
      be granted with an exercise price lower than that set forth in the preceding
      sentence if such Option is granted pursuant to an assumption or substitution
      for
      another option in a manner satisfying the provisions of Section 424(a) of the
      Code.

     

    ARTICLE
      VIII.  RESTRICTED STOCK
      AWARDS

     

               
      A.           
The Board is authorized to make of Awards of Restricted Stock
      to any
      Recipient selected by the Board in such amounts and subject to such terms and
      conditions as determined by the Board. All Awards of Restricted Stock shall
      be
      evidenced by a Restricted Stock Agreement.

    


               B.           
      Restricted Stock shall be subject to such restrictions on transferability
      and other restrictions as the Board may impose (including, without limitation,
      limitations on the right to

     

    
      
        
        

      

      
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    vote
      Restricted Stock or the right to receive dividends on the Restricted
      Stock). These restrictions may lapse separately or in combination at such times,
      pursuant to such circumstances, in such installments, or otherwise, as the
      Board
      determines at the time of the grant of the Award or thereafter.

     

               
      C.           
All Awards of Restricted Stock shall be subject to
      a "substantial risk of
      forfeiture" as defined by Section 409A-1(d) of the Code.  Except as
      otherwise determined by the Board at the time of the grant of the Award or
      thereafter, upon termination of employment or service during the applicable
      restriction period, Restricted Stock that is at that time subject to
      restrictions shall be forfeited; provided, however, that, the Board may
      (a) provide in any Restricted Stock Award Agreement that restrictions or
      forfeiture conditions relating to Restricted Stock will be waived in whole
      or in
      part in the event of terminations resulting from specified causes, and (b)
      in
      other cases waive in whole or in part restrictions or forfeiture conditions
      relating to Restricted Stock.

     

               
      D.           
Restricted Stock granted pursuant to the Plan may be evidenced
      in such
      manner as the Board shall determine. If certificates representing shares of
      Restricted Stock are registered in the name of the Participant, certificates
      must bear an appropriate legend referring to the terms, conditions, and
      restrictions applicable to such Restricted Stock, and the Company may, at its
      discretion, retain physical possession of the certificate until such time as
      all
      applicable restrictions lapse.

     

    ARTICLE
      IX.  COVENANTS OF THE
      COMPANY.

     

               
During
      the terms of the Awards, the Company shall keep available at all times the
      number of shares of Common Stock required to satisfy such Awards.

     

    ARTICLE
      X.  USE OF PROCEEDS
      FROM EXERCISE OF OPTIONS.

     

    Proceeds
      from the exercise of
      Options shall constitute general funds of the Company.

     

    ARTICLE
      XI. 
MISCELLANEOUS.

     

               
      A.           
Neither an Employee, Director or Consultant nor any person
      to whom an
      Option may be transferred shall be deemed to be the holder of, or to have any
      of
      the rights of a holder with respect to, any shares subject to such Award unless
      and until such person has satisfied all requirements for exercise, which can
      include an early exercise, of the Option pursuant to its terms, or until all
      restrictions on a Restricted Stock Award have lapsed, and the Company has issued
      such shares.

     

               
      B.           
Nothing in the Plan or any instrument executed or
      Award granted pursuant
      thereto shall confer upon any Employee, Director or Consultant or other holder
      of Awards or Common Stock issued upon exercise of Options any right to continue
      in the employ of the Company or any Affiliate (or to continue acting as a
      Director or Consultant) or shall affect the right of the Company or any
      Affiliate to terminate the employment of any Employee with or without cause,
      the
      right of the Company’s Board of Directors and/or the Company’s stockholders to
      remove any Director pursuant to the terms of the Company’s Articles of
      Incorporation and By-Laws and the provisions of Colorado
      Law, or the right to terminate the relationship of
      any Consultant with the Company or its Affiliates.

     

    
      
        
        

      

      
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C.           
      If the Company or its Affiliates is required to withhold any amounts
      by
      reason of federal, state or local tax laws, rules or regulations, in respect
      of
      the issuance of Awards or shares of stock pursuant to the Plan, the Company
      or
      such Affiliates shall be entitled to deduct and withhold such amounts from
      any
      cash payments to be made to the Recipient.  In any event, such person shall
      promptly make available to the Company or such Affiliate, when requested by
      the
      Company or such Affiliate, sufficient funds to meet the requirements of such
      withholding, and the Company or such Affiliate may take and authorize such
      steps
      as it may deem advisable in order to have such funds made available to the
      Company or such Affiliate from any funds or property due or to become due to
      such person.

     

               
      D.           
To the extent provided by the terms of an Option Agreement,
      the person to
      whom an Option is granted may satisfy any federal, state or local tax
      withholding obligation relating to the exercise or acquisition of stock under
      an
      Option by any of the following means or by a combination of such means: 
(i) tendering a cash payment; (ii) authorizing the Company to withhold shares
      from the shares of the stock otherwise issuable to the Recipient as a result
      of
      the exercise or acquisition of stock underlying the Option; or (iii) delivering
      to the Company unencumbered shares of the Company’s stock owned by the person
      acquiring the stock.  The Fair Market Value of any shares of Common Stock
      withheld or tendered to satisfy any such tax withholding obligations shall
      not
      exceed the amount determined by the applicable minimum statutory withholding
      rules.

     

               
      E.           
The Company shall not be required to issue fractional
      shares pursuant to
      this Plan and, accordingly, a Recipient may be awarded or required to purchase
      only whole shares.

     

               
      F.           
The Plan and all determinations made and actions taken
      hereunder, to the
      extent not otherwise governed by the Code or laws of the United States, shall
      be
      governed by the laws of the State of Colorado and construed accordingly, without
      reference to the conflict of laws principles.

     

               
      G.           
The receipt, transfer and exercise of any Award is subject
      to taxation
      under Section 83 of the Code.

     

    ARTICLE
      XII.  ADJUSTMENTS UPON
      CHANGES IN STOCK.

     

               
If
      any
      change is made in the stock subject to the Plan, or subject to any Award,
      without the receipt of consideration by the Company (through merger,
      consolidation, reorganization, recapitalization, reincorporation, stock
      dividend, dividend in property other than cash, stock split, liquidating
      dividend, combination of shares, exchange of shares, change in corporate
      structure or other transaction not involving the receipt of consideration by
      the
      Company), the Plan will be appropriately adjusted in the class(es) and maximum
      number of shares subject to the Plan, and the outstanding Awards will be
      appropriately adjusted in the class(es) and number of shares and price per
      share
      of stock subject to such outstanding Awards.  Such adjustments shall be
      made by the Board or the Committee, the determination of which shall be final,
      binding and conclusive.  (The conversion of any convertible securities of
      the Company shall not be treated as a transaction not involving the receipt
      of
      consideration by the Company.)

    


    
      
        
        

      

      
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    ARTICLE
      XIII.  AMENDMENT OF THE
      PLAN AND AWARDS.

     

               
      A.           
The Board at any time, and from time to time, may amend the
      Plan. 
However, except as provided in Article XII relating to adjustments upon changes
      in stock, no amendment shall be effective unless approved by the stockholders
      of
      the Company within twelve (12) months before or after the adoption of the
      amendment, where the amendment will:

     

    (i)           
      Increase the number of shares reserved for Awards under the Plan;

     

    (ii)           
      Modify the requirements as to eligibility for participation in the Plan (to
      the
      extent such modification requires stockholder approval in order for the Plan
      to
      satisfy the requirements of Section 422 of the Code); or

     

    (iii)           
      Modify the Plan in any other way if such modification requires stockholder
      approval in order for the Plan to satisfy the requirements of Section 422 of
      the
      Code.

     

               
      B.           
The Board may in its sole discretion submit any other amendment
      to the
      Plan for stockholder approval, including, but not limited to, amendments to
      the
      Plan intended to satisfy the requirements of Section 162(m) of the Code and
      the
      regulations promulgated thereunder regarding the exclusion of performance-based
      compensation from the limit on corporate deductibility of compensation paid
      to
      certain executive officers.

     

               
      C.           
It is expressly contemplated that the Board may amend
      the Plan in any
      respect the Board deems necessary or advisable to provide eligible Employees,
      Directors or Consultants with the maximum benefits provided or to be provided
      under the provisions of the Code and the regulations promulgated thereunder
      relating to Incentive Stock Options and/or to bring the Plan and/or Incentive
      Stock Options granted under it into compliance therewith.

     

               
      D.           
Rights and obligations of the Recipient under any Award granted
      before
      amendment of the Plan shall not be materially impaired by any amendment of
      the
      Plan except with the written consent of the Recipient, unless such amendment
      is
      necessary to comply with any applicable law, regulation or rule as determined
      in
      the sole discretion of the Board.

     

               
      E.           
The Board at any time, and from time to time, may amend, modify,
      extend,
      cancel or renew any Award or waive any restrictions or conditions applicable
      to
      any Award or any shares acquired upon the exercise thereof and accelerate,
      continue, extend or defer the exercise time for any Award or the vesting of
      any
      shares acquired upon the exercise thereof, including with respect to the period
      following a Recipient’s  termination of Continuous Status as an Employee,
      Director or Consultant; provided, however, that the rights and obligations
      under
      any Award shall not be materially impaired by any such amendment except with
      the
      written consent of the Recipient, unless such amendment is necessary to comply
      with any applicable law, regulation or rule as determined in the sole discretion
      of the Board.

     

               
The
      Board may accelerate the time at which an Option may first be exercised or
      the
      time during which an Option or any part thereof will vest notwithstanding the
      provisions in the Option Agreement stating
      the time at which it may first be exercised or the time
      during which it will vest.

    


    
      
        
        

      

      
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F.           
      The Board may amend the Plan to take into account changes in law and
      tax
      and accounting rules, as well as other developments, and to grant Awards that
      qualify for beneficial treatment under such rules without stockholder
      approval.

     

    ARTICLE
      XIV.  TERMINATION OR
      SUSPENSION OF THE PLAN.

     

               
      A.           
The Board may suspend or terminate the Plan at any time.  Unless
      sooner terminated, the Plan shall terminate on December 31, 2015, which shall
      be
      within ten (10) years from the date the Plan is adopted by the Board or approved
      by the stockholders of the Company, whichever is earlier.  No Awards may be
      granted under the Plan while the Plan is suspended or after it is
      terminated.

     

               
      B.           
Rights and obligations under any Award granted while
      the Plan is in
      effect shall not be impaired by suspension or termination of the Plan, except
      with the written consent of the Recipient, unless such impairment is necessary
      to qualify the Award as an Incentive Stock Option or to comply with any
      applicable law, regulation or rule all as determined in the sole discretion
      of
      the Board.

     

    ARTICLE
      XV.  EFFECTIVE DATE OF
      PLAN.

     

               
The
      Plan shall become effective as determined by the Board, but no Awards granted
      under the Plan shall be exercised unless and until the Plan has been approved
      by
      the stockholders of the Company, which approval shall be obtained within twelve
      (12) months before or after the date when the Plan is adopted by the
      Board.

     

    ARTICLE
      XVI.  COMPLIANCE WITH
      SECURITIES LAWS.

     

               
The
      grant of Awards and the issuance of shares of Common Stock upon the exercise
      of
      Options shall be subject to compliance with all applicable requirements of
      federal and state law with respect to such securities.  Options may not be
      exercised if the issuance of shares of Common Stock upon exercise would
      constitute a violation of any applicable federal or state securities laws or
      other laws or regulations or the requirements of any stock exchange or market
      system upon which the Common Stock may then be listed.  In addition, no
      Option may be exercised unless (A) a registration statement under the Act shall
      at the time of exercise of the Option be in effect with respect to the Common
      Stock shares to be issued upon the exercise of that Option or (B) in the opinion
      of counsel to the Company, the Common Stock 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 Act.  The inability of the
      Company to obtain from any regulatory body having jurisdiction the authority,
      if
      any, deemed by the Company’s counsel to be necessary to the lawful issuance and
      sale of any Common Stock shares under the Plan 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 of
      the exercise of any Option, the Company may require the Recipient 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.   The Company may,
      upon the advice of counsel to the Company, place legends on stock certificates
      issued under the Plan as such counsel deems necessary or appropriate in order
      to

    


    
      
        
        

      

      
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    comply
      with applicable securities laws, including, but not limited to,
      legends restricting the transfer of the Common Stock.

     

    ARTICLE
      XVII.  COMPLIANCE WITH SECTION 409A.

     

               
To
      the
      extent that the Board determines that any Award granted under the Plan is
      subject to Section 409A of the Code, the Option Agreement or other agreement
      evidencing the Award will incorporate the terms and conditions required by
      Section 409A of the Code.  To the extent applicable, the Plan and Award
      agreements will be interpreted in accordance with Section 409A of the Code
      and
      Department of Treasury regulations and other interpretive guidance issued
      thereunder, including without limitation any such regulations or other guidance
      that may be issued after the Plan's effective date.  Notwithstanding any
      provision of the Plan to the contrary, in the event that following the Plan's
      effective date the Board determines that any Award may be subject to Section
      409A of the Code and related Department of Treasury guidance (including such
      Department of Treasury guidance as may be issued after the Plan's effective
      date), the Board may adopt such amendment to the Plan and applicable Award
      agreements or adopt other policies and procedures (including amendments,
      policies and procedures with retroactive effect), or take any other actions,
      that the Board determines are necessary or appropriate to (a) exempt the Award
      from Section 409A of the Code and/or preserve the intended tax treatment of
      the
      benefits provided with respect to the Award, or (b) comply with the requirements
      of Section 409A of the Code and related Department of Treasury
      guidance.

     

    *
      * * * *

    

       

      

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