goldenphoenixs8ex41.htm


    
      

      

    

    Exhibit 4.1

    
      GOLDEN
PHOENIX MINERALS, INC.,

      A
Minnesota corporation

      


      2007
EQUITY INCENTIVE PLAN

      


      


      1.         PURPOSE.  The
purpose of this Plan is to provide incentives to attract, retain and motivate
Eligible Persons whose present and potential contributions are important to the
success of the Company by offering them an opportunity to participate in the
Company’s future performance through awards of Incentive and Nonqualified Stock
Options (“Options”), Stock (“Restricted Stock” or “Unrestricted Stock”) and
Stock Appreciation Rights (“SARs”).  This Plan is not intended to
replace any current plan of, or awards issued by, the Company, nor will it limit
the ability of the Company to create additional or new plans, or to issue
additional or new awards.  Capitalized terms not defined in the text
are defined in Section 29.

      


      2.         ADOPTION AND SHAREHOLDER
APPROVAL.  This Plan will be approved by the Shareholders of
the Company, consistent with applicable laws, after the date this Plan is
approved by the Board.  No Award will be granted after termination of
this Plan but all Awards granted prior to termination will remain in effect in
accordance with their terms.  The effective date of this Plan will be
the date of approval by the Board (the “Effective Date”) and shall be submitted
for approval to the Shareholders within twelve (12) months of such
adoption.  So long as the Company is subject to Section 16(b) of the
Exchange Act, the Company will comply with the requirements of Rule 16b-3 (or
its successor), as amended.

      


      3.         TERM OF
PLAN.  Unless earlier terminated as provided herein, this Plan
will terminate ten (10) years from the date this Plan is adopted by the
Board.

      


      4.         SHARES SUBJECT TO THIS
PLAN.

      


      4.1.      Number of Shares
Available.  Subject to Section 4.2, the total number of Shares
reserved and available for grant and issuance pursuant to this Plan will be
equal to nine percent (9%) of the total number of outstanding shares of common
stock of the Company at the Effective Date with an increase at the beginning of
each fiscal year if additional shares of common stock were issued in the
preceding fiscal year so that the total number of Shares reserved and available
for grant and issuance, not including Shares that are subject to outstanding
Awards, will be nine percent (9%) of the total number of outstanding shares of
common stock of the Company on that date (the “Maximum
Number”).  Notwithstanding the foregoing, not more than two million
(2,000,000) shares of Stock shall be granted in the form of Incentive Stock
Options.

      


      Shares
issued under the Plan will be drawn from authorized and unissued shares or
shares now held or subsequently acquired by the Company.

      


      Outstanding shares of the Company
shall, for the purposes of such calculation, include the number of shares of
Stock into which other securities or instruments issued by the Company are
currently convertible (e.g., convertible preferred stock, convertible
debentures, or warrants for common stock), but not outstanding Options to
acquire Stock.

      



      
        
           


        

        
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      4.1.1.     Future
Awards.  Subject to Section 4.2 and to the fullest extent
permissible under Rule 16b-3 under the Exchange Act and Section 422 of
the Code and any other applicable laws, rules and regulations, (i) if an
Award is canceled, terminates, expires, is forfeited or lapses for any reason
without having been exercised or settled, any shares of Stock subject to the
Award will be added back into the Maximum Number and will again be available for
the grant of an Award under the Plan and (ii) and the number of shares of Stock
withheld to satisfy a Participant’s minimum tax withholding obligations will be
added back into the Maximum Number and will be available for the grant of an
Award under the Plan.  Also, only the net numbers of Shares that are
issued pursuant to the exercise of an Award will be counted against the Maximum
Number.

      


      However, in the event that prior to the
Award’s cancellation, termination, expiration, forfeiture or lapse, the holder
of the Award at any time received one or more elements of “beneficial ownership”
pursuant to such Award (as defined by the SEC, pursuant to any rule or
interpretations promulgated under Section 16 of the Exchange Act), the Shares
subject to such Award will not again be made available for regrant under the
Plan.

      


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

      


      4.1.3.     Reserve of
Shares.  At all times, the Company will reserve and keep
available a sufficient number of Shares as will be required to satisfy the
requirements of all outstanding Awards granted under this Plan.  The
Shares to be issued hereunder upon exercise of an Award may be either authorized
but unissued; supplied to the Plan through acquisitions of Shares on the open
market; Shares purchased under the Plan and forfeited back to the Plan; Shares
surrendered in payment of the exercise price of an option; or Shares withheld
for payment of applicable employment taxes and/or withholding obligations
resulting from the exercise of an Option.  The following rules will
apply for purposes of the determination of the number of Shares available for
grant under the Plan:

      


      i.           Grants.  The
grant of an Award will reduce the Shares available for grant under the Plan by
the number of Shares subject to such Award.

      


      ii.          Outstanding.  While
an Award is outstanding, it will be counted against the authorized pool of
Shares regardless of its vested status.

      


      4.2.           Adjustments.  Should
any change be made to the Stock of the Company by reason of any stock split
(including reverse stock split), stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without the Company’s receipt of consideration, the
Administrator will make the appropriate adjustments to (i) the maximum number
and/or class of securities issuable under the Plan; and (ii) the number and/or
class of securities and the exercise price per Share in effect under each
outstanding Award in order to prevent the dilution or enlargement of benefits
thereunder; provided however, that the number of Shares subject to any Award
will always be a whole number and the Administrator will make such adjustments
as are necessary to insure Awards of whole Shares.


      
        
           


        

        
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      4.3.      Limitations on
Awards.  Notwithstanding any provision in the Plan to the
contrary (but subject to adjustment as provided in Section 4.2), the
Maximum Number of Shares of Stock with respect to one or more Options and/or
SARs that may be granted during any one fiscal year under the Plan to any one
Participant will be five hundred thousand (500,000), except that the Company may
make an additional one-time grant of such Award to a newly-hired individual for
up to five hundred thousand (500,000) shares for a maximum annual grant of one
million (1,000,000) (all of which may be granted as Incentive Stock Options
subject to the limitations set forth in Section
6.3.1).  Determinations under the preceding sentence will be made in a
manner that is consistent with Section 162(m) of the Code and regulations
promulgated thereunder.  The provisions of this Section will not apply
in any circumstance with respect to which the Administrator determines that
compliance with Section 162(m) of the Code is not necessary.

       

      4.4.      No
Repricing.  Absent shareholder approval, neither the
Administrator nor the Board will have any authority, with or without the consent
of the affected holders of Awards, to "reprice" an Award in the event of a
decline in the price of Shares after the date of their initial grant either by
reducing the exercise price from the original exercise price or through
cancellation of outstanding Awards in connection with regranting of Awards at a
lower price to the same individual.  This paragraph may not be
amended, altered or repealed by the Administrator or the Board without approval
of the shareholders of the Company.

      


      4.5.      No
Reloading.  No Option or SAR will provide for the automatic
grant of replacement or reload Options or SARs upon the Participant exercising
the Option or SAR and paying the Exercise Price by tendering Shares of Stock,
net exercise or otherwise. This paragraph may not be amended, altered or
repealed by the Administrator or the Board without approval of the shareholders
of the Company.

      


      5.         ADMINISTRATION OF THIS
PLAN.

      


      5.1.       Authority.  Authority
to control and manage the operation and administration of this Plan will be
vested in a committee consisting of two (2) or more independent members of the
Board (the “Committee”).  It is intended that the directors appointed
to serve on the Committee will be “non-employee directors” (within the meaning
of Rule 16b-3 promulgated under the Exchange Act) and “outside directors”
(within the meaning of Section 162(m) of the Code) to the extent that Rule 16b-3
and, if necessary for relief from the limitation under Section 162(m) of the
Code and such relief sought by the Company, Section 162(m) of the Code,
respectively, are applicable.  However, the mere fact that a Committee
member will fail to qualify under either of the foregoing requirements will not
invalidate any Award made by the Committee which Award is otherwise validly made
under the Plan.  Members of the Committee may be appointed from time
to time by, and will serve at the pleasure of, the Board.  As used
herein, the term “Administrator” means the Committee.

      


      5.2.      Interpretation.   Subject
to the express provisions of this Plan, the Administrator will have the
exclusive power, authority and discretion to:

       

      
        
          
             


          

          
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      (1)          construe
and interpret this Plan and any agreements defining the rights and obligations
of the Company and Participants under this Plan;

       

      (2)          select
Participants;

      


      (3)          determine
the terms and conditions of any Award granted under the Plan, including, but not
limited to, the Exercise Price, grant price or purchase price, any restrictions
or limitations on the Award, any schedule for lapse of forfeiture restrictions
or restrictions on the exercisability of the Award, and acceleration or waivers
thereof, based in each case on such considerations as the Administrator in its
sole discretion determines that is not inconsistent with any rule or regulation
under any tax or securities laws or includes an alternative right that does not
disqualify an Incentive Stock Option under applicable
regulations.  Determinations made by the Administrator under this Plan
need not be uniform but may be made on a Participant-by-Participant
basis;

      


      (4)          determine
the number of Shares or other consideration subject to Awards;

      


      (5)          determine
whether Awards will be subject to a condition, or grant a right, that is not
inconsistent with any rule or regulation under any tax or securities laws or
includes an alternative right that does not disqualify an incentive stock option
under applicable regulations;

      


      (6)          prescribe
the form of each Award Agreement, which need not be identical for each
Participant;

      


      (7)          further
define the terms used in this Plan;

      


      (8)          correct
any defect or supply any omission or reconcile any inconsistency in this Plan or
in any Award Agreement;

      


      (9)          provide
for rights of refusal and/or repurchase rights;

      


      (10)        amend
outstanding Award Agreements to provide for, among other things, any change or
modification which the Administrator could have provided for upon the grant of
an Award or in furtherance of the powers provided for herein that does not
disqualify an Incentive Stock Option under applicable regulations unless the
Participant so consents;

      


      (11)        prescribe,
amend and rescind rules and regulations relating to the administration of this
Plan; and

       

      (12)        make
all other determinations necessary or advisable for the administration of this
Plan.

      


      5.3.      Decisions
Binding.  Any decision or action of the Administrator in
connection with this Plan or Awards granted or shares of Stock purchased under
this Plan will be final and binding.  The Administrator will not be
liable for any decision, action or omission respecting this Plan, or any Awards
granted or shares of Stock sold under this Plan.

      



      
        
           


        

        
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      5.4.      Limitation on
Liability.  To the extent permitted by applicable law in effect
from time to time, no member of the Committee will be liable for any action or
omission of any other member of the Committee nor for any act or omission on the
member’s own part, excepting only the member’s own willful misconduct, gross
negligence, or bad faith and without reasonable belief that it was in the best
interests of the Company, arising out of or related to this Plan.  The
Company will pay expenses incurred by, and satisfy a judgment or fine rendered
or levied against, a present or former member of the Committee in any action
against such person (whether or not the Company is joined as a party defendant)
to impose liability or a penalty on such person for an act alleged to have been
committed by such person while a member of the Committee arising with respect to
this Plan or administration thereof or out of membership on the Committee or by
the Company, or all or any combination of the preceding, provided, the Committee
member was acting in good faith, within what such Committee member reasonably
believed to have been within the scope of his or her employment or authority and
for a purpose which he or she reasonably believed to be in the best interests of
the Company or its shareholders.  Payments authorized hereunder
include amounts paid and expenses incurred in settling any such action or
threatened action.  The provisions of this section will apply to the
estate, executor, administrator, heirs, legatees or devisees of a Committee
member, and the term “person” as used on this section will include the estate,
executor, administrator, heirs, legatees, or devisees of such
person.

      


      6.         GRANT OF OPTIONS; TERMS AND
CONDITIONS OF GRANT.

      


      6.1.      Grant of
Options.  One or more Options may be granted to any Eligible
Person.  Subject to the express provisions of this Plan, the
Administrator will determine from the Eligible Persons those individuals to whom
Options under this Plan may be granted.  Each Option granted under
this Plan will be evidenced by an Award Agreement, which will expressly identify
the Option as an Incentive Stock Option or a Non-Qualified Stock Option. The
Shares underlying a grant of an Option may be in the form of Restricted Stock or
Unrestricted Stock.

      


      Further, subject to the express
provisions of this Plan, the Administrator will specify the grant date (the
“Grant Date”), the number of Shares covered by the Option, the Exercise Price
and the terms and conditions for exercise of the Options.  As soon as
practicable after the Grant Date, the Company will provide the Participant with
a written Award Agreement in the form approved by the
Administrator.

      


      The Administrator may, in its absolute
discretion, grant Options under this Plan at any time and from time to time
before the expiration of this Plan.

      


      6.2.      General Terms and
Conditions.  Except as otherwise provided herein, the Options
will be subject to the following terms and conditions and such other terms and
conditions not inconsistent with this Plan as the Administrator may
impose:

      


      6.2.1.     Exercise of Option.
The Administrator may determine in its discretion whether any Option will be
subject to vesting and the terms and conditions of any such
vesting.  The Award Agreement will contain any such vesting
schedule.

      


      6.2.2.     Option
Term.  Each Option and all rights or obligations thereunder
will expire on such date as will be determined by the Administrator, but not
later than ten (10) years after the Grant Date (five (5) years in the case of an
Incentive Stock Option when the Optionee owns more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company (“Ten Percent
Shareholder”)), and will be subject to earlier termination as hereinafter
provided.

      



      
        
           


        

        
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      6.2.3.     Exercise
Price.  The Exercise Price of any Option will be determined by
the Administrator when the Option is granted and may not be less than one
hundred percent (100%) of the Fair Market Value of the Shares on the Grant Date,
and the Exercise Price of any Incentive Stock Option granted to a Ten Percent
Shareholder will not be less than one hundred ten percent (110%) of the Fair
Market Value of the Shares on the Grant Date.  Payment for the Shares
purchased will be made in accordance with Section 10 of this
Plan.  The Administrator is authorized to issue Options, whether
Incentive Stock Options or Non-Qualified Stock Options, at an option price in
excess of the Fair Market Value on the Grant Date.

      


      6.2.4.     Method of
Exercise.  Options may be exercised only by delivery to the
Company of a stock option exercise agreement (the “Exercise Agreement”) in a
form approved by the Administrator (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding the Participant’s investment intent and
access to information and other matters, if any, as may be required or desirable
by the Company to comply with applicable securities laws, together with payment
in full of the Exercise Price for the number of Shares being
purchased.

      


      6.2.5.     Transferability of
Options.  Except as otherwise provided below for Non-Qualified
Stock Options, no Option will be transferable other than by will or by the laws
of descent and distribution and during the lifetime of a Participant only the
Participant, his guardian or legal representative may exercise an Option, except
in the case of an Incentive Stock Option, pursuant to a domestic relations order
that would satisfy Section 414(p)(1)(A) of the Code if such Section applied to
an Award under the Plan and Nonqualified Options may be transferred to a
Participant's former spouse pursuant to a property settlement made part of an
agreement or court order incident to the divorce.

      


      At its discretion, the Administrator
may provide for transfer of an Option (other than an Incentive Stock Option),
without payment of consideration, to the following family members of the
Participant, including adoptive relationships: a child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law, niece, nephew,
former spouse (whether by gift or pursuant to a domestic relations order), any
person sharing the employee’s household (other than a tenant or employee), a
family-controlled partnership, corporation, limited liability company and trust,
or a foundation in which family members heretofore described control the
management of assets. The assigned portion may only be exercised by the person
or persons who acquire a proprietary interest in the Option pursuant to the
assignment.  The terms applicable to the assigned portion will be the
same as those in effect for the Option immediately prior to such assignment and
will be set forth in such documents issued to the assignee as the Administrator
may deem appropriate.  A request to assign an Option may be made only
by delivery to the Company of a written stock option assignment request in a
form approved by the Administrator, stating the number of Options and Shares
underlying Options requested for assignment, that no consideration is being paid
for the assignment, identifying the proposed transferee, and containing such
other representations and agreements regarding the Participant’s investment
intent and access to information and other matters, if any, as may be required
or desirable by the Company to comply with applicable securities
laws.

      


      6.2.6.     Beneficiaries.  Notwithstanding
Section 6.2.5, a Participant may, in the manner determined by the Administrator,
designate a beneficiary to exercise the rights of the Participant and to receive
any distribution with respect to any Option upon the Participant’s
death.  If no beneficiary has been designated or survives the
Participant, payment will be made to the Participant’s
estate.  Subject to the foregoing, a beneficiary designation may be
changed or revoked by a Participant at any time, provided the change or
revocation is filed with the Administrator.

      



      
        
           


        

        
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      6.2.7.     Exercise After Certain
Events.

      


      
        	
                 
      

              	
                i.

              	
                Termination of
      Employment -
Employee/Officer

              


      

      


         (1)         Incentive Stock
Options.

      


         
(a)        Termination of All
Services.  If for any reason other than retirement (as defined
below), permanent and total Disability (as defined below) or death, a
Participant Terminates employment with the Company (including employment as an
Officer of the Company), vested Incentive Stock Options held at the date of such
termination may be exercised, in whole or in part, at any time within three (3)
months after the date of such Termination or such lesser period specified in the
Award Agreement (but in no event after the earlier of (i) the expiration date of
the Incentive Stock Option as set forth in the Award Agreement, and (ii) ten
(10) years from the Grant Date (five (5) years for a Ten Percent (10%)
Shareholder)).

      


         
(b)        Continuation of Services as
Consultant/Advisor.  If a Participant granted an Incentive
Stock Option terminates employment but continues as a consultant, advisor or in
a similar capacity to the Company, Participant need not exercise the Incentive
Stock Option within three (3) months of Termination of employment but will be
entitled to exercise within three (3) months of Termination of services to the
Company (one (1) year in the event of permanent and total Disability or death)
or such lesser period specified in the Award Agreement (but in no event after
the earlier of (i) the expiration date of the Option as set forth in the Award
Agreement, and (ii) ten (10) years from the Grant Date).  However, if
Participant does not exercise within three (3) months of Termination of
employment, the Option will not qualify as an Incentive Stock
Option.

      


        
(2)         Non-Qualified Stock
Options.

      


         
(a)        Termination of All
Services.  If for any reason other than Retirement (as defined
below), permanent and total Disability (as defined below) or death, a
Participant terminates employment with the Company (including employment as an
Officer of the Company), vested Options held at the date of such Termination may
be exercised, in whole or in part, at any time within three (3) months of the
date of such Termination or such lesser period specified in the Award Agreement
(but in no event after the earlier of (i) the expiration date of the Option as
set forth in the Award Agreement, and (ii) ten (10) years from the Grant
Date).

      


         
(b)        Continuation of Services as
Consultant/Advisor.  If a Participant Terminates employment but
continues as a consultant, advisor or in a similar capacity to the Company
Participant need not exercise the Option within three (3) months of Termination
but will be entitled to exercise within three (3) months of Termination of
services to the Company (one (1) year in the event of permanent and total
Disability or death) or such lesser period specified in the Award Agreement (but
in no event after the earlier of (i) the expiration date of the Option as set
forth in the Award Agreement, and (ii) ten (10) years from the Grant
Date).

      


        
ii.           Retirement.  If
a Participant ceases to be an employee of the Company (including as an officer
of the Company) as a result of Retirement, Participant need not exercise the
Option within three (3) months of Termination of employment but will be entitled
to exercise the Option within the maximum term of the Option to the extent the
Option was otherwise exercisable at the date of Retirement.  However,
if a Participant does not exercise within three (3) months of Termination of
employment, the Option will not qualify as an Incentive Stock Option if it
otherwise so qualified.  The term “Retirement” as used herein means
such Termination of employment as will entitle the Participant to early or
normal retirement benefits under any then existing pension or salary
continuation plans of the Company excluding 401(k) participants (except as
otherwise covered under other pension or salary continuation
plans).

      



      
        
           


        

        
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iii.           Permanent Disability and
Death.  If a Participant becomes permanently and totally
Disabled while employed by the Company (including as an officer of the Company),
or dies while employed by the Company (including as an Officer of the Company)
or death occurs three (3) months thereafter, vested Options then held may be
exercised by the Participant, the Participant’s personal representative, or by
the person to whom the Option is transferred by will or the laws of descent and
distribution, in whole or in part, at any time within one (1) year after the
Termination of employment because of the Disability or death or any lesser
period specified in the Award Agreement (but in no event after the earlier of
(i) the expiration date of the Option as set forth in the Award Agreement, and
(ii) ten (10) years from the Grant Date).

      


           
      6.3.      Limitations on Grant of
Incentive Stock Options.

      


                
 6.3.1.     Threshold.  The
aggregate Fair Market Value (determined as of the Grant Date) of the Shares for
which Incentive Stock Options may first become exercisable by any Participant
during any calendar year under this Plan, together with that of Shares subject
to Incentive Stock Options first exercisable by such Participant under any other
plan of the Company or any Subsidiary, will not exceed $100,000.  For
purposes of this Section, all Options in excess of the $100,000 threshold will
be treated as Non-Qualified Stock Options notwithstanding the designation as
Incentive Stock Options.  For this purpose, Options will be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares will be determined as of the date the Option with respect to such
Shares is granted.

      


              
   6.3.2.     Compliance with Section 422
of the Code.  There will be imposed in the Award Agreement
relating to Incentive Stock Options such terms and conditions as are required in
order that the Option be an "incentive stock option" as that term is defined in
Section 422 of the Code.

      


              
   6.3.3.     Requirement of
Employment.  No Incentive Stock Option may be granted to any
person who is not an Employee of the Company or a Subsidiary of the
Company.

      


      7.         RESTRICTED STOCK
AWARDS.

      


      7.1.      Grant of Restricted Stock
Awards.  Subject to the terms and provisions of this Plan, the
Administrator is authorized to make awards of Restricted Stock to any Eligible
Person in such amounts and subject to such terms and conditions as may be
selected by the Administrator (a “Restricted Stock Award”).  All
Restricted Stock Awards will be evidenced by an Award Agreement.

      


      7.2.      Issue Date and Vesting
Date.  At the time of the grant of shares of Restricted Stock,
the Administrator will establish an Issue Date or Issue Dates and a Vesting Date
or Vesting Dates with respect to such Shares.  The Administrator may
divide such shares of Restricted Stock into classes and assign a different Issue
Date and/or Vesting Date for each class.  If the Participant is
employed by the Company on an Issue Date (which may be the date of grant), the
specified number of shares of Restricted Stock will be issued in accordance with
the provisions of Section 7.6.  Provided that all conditions to the
vesting of a share of Restricted Stock imposed hereto are satisfied, such share
will vest and the restrictions will cease to apply to such share.

      



      
        
           


        

        
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      7.3.      Conditions to
Vesting.  Restricted Stock will be subject to such restrictions
on or conditions to vesting as the Administrator may impose (including, without
limitation, as a condition to the vesting of any class or classes of shares of
Restricted Stock, that the Participant or the Company achieves such performance
goals as the Administrator may specify as provided for in this Plan, limitations
on the right to vote Restricted Stock or the right to receive dividends on the
Restricted Stock).  These restrictions may lapse separately or in
combination at such times, under such circumstances, in such installments,
time-based, or upon the satisfaction of performance goals as provided for in
this Plan, as the Administrator determines at the time of the grant of the Award
or thereafter.

      


      7.4.      Voting and
Dividends.  Unless the Administrator in its sole and absolute
discretion otherwise provides in an Award Agreement, holders of Restricted Stock
will have the right to vote such Restricted Stock and the right to receive any
dividends declared or paid with respect to such Restricted Stock.  The
Administrator may require that any dividends paid on shares of Restricted Stock
will be held in escrow until all restrictions on such shares have lapsed and/or
the Administrator may provide that any dividends paid on Restricted Stock must
be reinvested in shares of Stock, which may or may not be subject to the same
vesting conditions and restrictions applicable to such Restricted
Stock.  All distributions, if any, received by a Participant with
respect to Restricted Stock as a result of any stock split, stock dividend,
combination of shares, or other similar transaction will be subject to the
restrictions applicable to the original Award.

      


      7.5.      Forfeiture.  Except
as otherwise determined by the Administrator at the time of the grant of the
Award or thereafter, upon failure to affirmatively accept the grant of a
Restricted Stock Award by execution of a Restricted Stock Award Agreement,
termination of employment during the applicable restriction period, failure to
satisfy the restriction period or failure to satisfy a performance goal during
the applicable restriction period, Restricted Stock that is at that time subject
to restrictions will immediately be forfeited and returned to the Company; provided, however, that the
Administrator may provide in any 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 the Administrator
may in other cases waive in whole or in part restrictions or forfeiture
conditions relating to Restricted Stock. The Company also will have the right to
require the return of all dividends paid on such shares, whether by termination
of any escrow arrangement under which such dividends are held or
otherwise.

      


      7.6.      Certificates for Restricted
Stock.  Restricted Stock granted under the Plan may be
evidenced in such manner as the Administrator will determine.  The
Administrator may provide in an Award Agreement that either (i) the Secretary of
the Company will hold such certificates for the Participant’s benefit pursuant
to the provisions of this Plan until such time as the Restricted Stock is
forfeited to the Company or the restrictions lapse) or (ii) such certificates
will be delivered to the Participant, provided, however, that such certificates
will bear a legend or legends that comply with the applicable securities laws
and regulations and make appropriate reference to the restrictions imposed under
this Plan and the Award Agreement.

      



      
        
           


        

        
          9

          
            

          

        

        
           


        

      


      7.7.      Restrictions on Transfer
Prior to Vesting.  Unless otherwise provided, prior to the
vesting of Restricted Stock, Restricted Stock Awards, granted under this Plan,
and any rights and interests therein, including the Restricted Stock itself,
will not be transferable or assignable by the Participant, and may not be made
subject to execution, attachment or similar process, otherwise than by will or
by the laws of descent and distribution or as consistent with the Award
Agreement provisions relating thereto.  Unless otherwise provided in
this Plan, during the lifetime of the Participant, a Restricted Stock Award and
any rights and interests therein, will be exercisable only by the Participant,
and any election with respect thereto may be made only by the
Participant.  Any attempt to transfer a Restricted Stock Award or any
rights and interests therein including the Restricted Stock itself, will be void
and unless the Administrator determines in its sole and absolute discretion that
the attempt was inadvertent or unintentional, such Award, including the
Restricted Stock itself and any rights and interests therein, will be forfeited
by the Participant.

      


      7.8.      Consequences of
Vesting.  Upon the vesting of a share of Restricted Stock
pursuant to the terms of the Plan and the applicable Award Agreement, the
restrictions as provided by the Administrator will cease to apply to such
share.  Reasonably promptly after a share of Restricted Stock vests,
the Company will cause to be delivered to the Participant to whom such shares
were granted, a certificate evidencing such share, free of the legend referenced
with respect to such restriction.  Notwithstanding the foregoing, such
share still may be subject to restrictions on transfer as a result of applicable
securities laws or otherwise pursuant to this Plan.

      


      8.         UNRESTRICTED STOCK
AWARDS.  The Administrator may, in its sole discretion, award
Unrestricted Stock to any Participant as a Stock Bonus or otherwise pursuant to
which such Participant may receive shares of Stock free of restrictions or
limitations that would otherwise be applied under Section 7 of this
Plan.

      


      9.         STOCK APPRECIATION
RIGHTS.

      


                 
9.1.      Awards of
SARs.  A SAR is an award to receive a number of Shares (which
may consist of Restricted Stock), or cash, or Shares and cash, as determined by
the Administrator in accordance with this Plan.  A SAR will be awarded
pursuant to an Award Agreement that will be in such form (which need not be the
same for each Participant) as the Administrator will from time to time approve,
and will comply with and be subject to the terms and conditions of this
Plan.  A SAR may vary from Participant to Participant and between
groups of Participants, and may be based upon performance objectives as provided
for in this Plan.

      


      9.2.      Exercise
Price.  The exercise price per share of an SAR will be
determined by the Administrator at the time of grant, but will in no event be
less than the Fair Market Value of a share of Company Stock on the date of
grant.

      


                 9.3.       Term.  The
term of a SAR will be set forth in the Award Agreement as determined by the
Administrator.  

      


                 9.4.       Exercise.  A
Participant desiring to exercise a SAR will give written notice of such exercise
to the Company no less than one nor more than ten business days in advance of
the effective date of the proposed exercise.  Such notice will specify
the number of Shares with respect to which the SAR is being exercised, and the
proposed effective date of the proposed exercise, which notice will state the
proportion of Shares and cash that the Participant desires to receive pursuant
to the SAR exercised, subject to the discretion of the Administrator, and will
be signed by the Participant.  Upon receipt of the notice from the
Participant, subject to the Administrator’s election to pay cash as provided
below, the Company will deliver to the person entitled thereto (i) a certificate
or certificates for Shares and/or (ii) a cash payment, in accordance with
Section 9.5.  The later of the date the Company receives written
notice of such exercise or the proposed effective date set forth in the written
notice hereunder is referred to in this Section as the "exercise
date."

      



      
        
           


        

        
          10

          
            

          

        

        
           


        

      


                 9.5.       Number of Shares or Amount
of Cash.  Subject to the discretion of the Administrator to
substitute cash for Shares, or some portion of the Shares for cash, the amount
of Shares that may be issued pursuant to the exercise of a SAR will be
determined by dividing: (i) the total number of Shares as to which the SAR is
exercised, multiplied by the amount by which the Fair Market Value of the Shares
on the exercise date exceeds the Fair Market Value of a Share on the date of
grant of the SAR, by (ii) the Fair Market Value of a Share on the exercise date;
provided, however, that fractional Shares will not be issued and in lieu
thereof, a cash adjustment will be paid.  In lieu of issuing Shares
upon the exercise of a SAR, the Administrator in its sole discretion may elect
to pay the cash equivalent of the Fair Market Value of the Shares on the
exercise date for any or all of the Shares that would otherwise be issuable upon
exercise of the SAR. 

      


      9.6.      Effect of
Exercise.  A
partial exercise of an SAR will not affect the right to exercise the remaining
SAR from time to time in accordance with this Plan and the applicable Award
Agreement with respect to the remaining shares subject to the SAR.

      


                 9.7.       Forfeiture.  Except
as otherwise determined by the Administrator at the time of the grant of the
Award or thereafter, upon failure to affirmatively accept the grant of a SAR by
execution of an Award Agreement, or an event of forfeiture pursuant to the Award
Agreement including failure to satisfy any restriction period or a performance
objective, any SAR that has not vested prior to the date of termination will
automatically expire, and all of the rights, title and interest of the
Participant thereunder will be forfeited in their entirety; provided, however
that the Administrator may provide in any Award Agreement that restrictions or
forfeiture conditions relating to the SAR will be waived in whole or in part in
the event of termination resulting from specified causes, and the Administrator
may in other cases waive in whole or in part restrictions or forfeiture
conditions relating to the SAR.

      


      9.8.      Effect of Termination of
Employment.  Notwithstanding the foregoing, the provisions set
forth in Section 6.2.7 with respect to the exercise of Options following
termination of employment will apply as well to such exercise of
SARs.

      


      9.9.      Transferability.  During
the lifetime of a Participant each SAR granted to a Participant will be
exercisable only by the Participant and no SAR will be assignable or
transferable otherwise than by will or by the laws of descent and
distribution.  In no event may a SAR be transferred for
consideration.  Notwithstanding the foregoing, to the extent
permissible, SARs may be transferred to a Participant's former spouse pursuant
to a property settlement made part of an agreement or court order incident to
the divorce.

      


      10.       PAYMENT FOR SHARE
PURCHASES.

      


      10.1.     Payment.  Payment
for Shares purchased pursuant to this Plan may be made in cash (by check) or,
where expressly approved for the Participant at the sole discretion of the
Administrator and where permitted by law as follows:

      


      10.1.1.   Cancellation of
Indebtedness.  By cancellation of indebtedness of the Company
to the Participant.

      



      
        
           


        

        
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      10.1.2.   Surrender of
Shares.  By surrender of shares of Stock of the Company that
have been owned by the Participant for more than six (6) months or lesser period
if the surrender of Shares is otherwise exempt from Section 16 of the Exchange
Act and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares.

      


      10.1.3.   Deemed Net-Stock
Exercise.  By forfeiture of Shares equal to the value of the
exercise price pursuant to a “deemed net-stock exercise” by requiring the
Participant to accept that number of Shares determined in accordance with the
following formula, rounded down to the nearest whole integer:

       

      
        
          	 	 


        

      

      where:

      


      a
=       net Shares to be issued to
Participant

      


      b
=       number of Awards being
exercised

      


      c
=       Fair Market Value of a
Share

      


      d
=       Exercise price of the
Awards

      


      10.1.4.   Broker-Assisted.  By
delivering a properly executed exercise notice to the Company together with a
copy of irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds necessary to pay the exercise price and the
amount of any required tax or other withholding obligations.

      


      10.1.5    Combination of
Methods.  By any combination of the foregoing methods of
payment or any other consideration or method of payment as will be permitted by
applicable corporate law.

      



      
        
           


        

        
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      11.           WITHHOLDING
TAXES.

      


      11.1.    Withholding
Generally.  Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan or Shares are forfeited pursuant to a “deemed
net-stock exercise,” the Company may require the Participant to remit to the
Company by cash, or check payable to the Company an amount sufficient to satisfy
federal, state and local taxes and FICA withholding requirements prior to the
delivery of any certificate or certificates for such Shares.  When,
under applicable tax laws, a Participant incurs tax liability in connection with
the exercise or vesting of any Award, the Company will have the authority and
right to deduct or withhold an amount sufficient to satisfy federal, state and
local taxes and FICA withholding requirements, with respect to such
transactions.  Any such payment must be made, or any such withholding
may be made, promptly when the amount of such obligation becomes
determinable.

      


      11.2.    Stock for
Withholding.  To the extent permissible under applicable tax,
securities and other laws, the Administrator may, in its sole discretion and
upon such terms and conditions as it may deem appropriate, permit a Participant
to satisfy his or her obligation to pay any such withholding tax, in whole or in
part, with Stock up to an amount not greater than the Company’s minimum
statutory withholding rate for federal and state tax purposes, including payroll
taxes.  The Administrator may exercise its discretion, by (i)
directing the Company to apply shares of Stock to which the Participant is
entitled as a result of the exercise of an Award, or (ii) delivering to the
Company Shares of Stock owned by the Participant for more than six (6) months,
unless the delivery of the Shares is otherwise exempt from Section 16 of the
Exchange Act.  A Participant who has made an election pursuant to this
Section 11.2 may satisfy his or her withholding obligation only with shares of
Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting or
other similar requirements.  The shares of Stock so applied or
delivered for the withholding obligation will be valued at their Fair Market
Value as of the date of measurement of the amount of income subject to
withholding.

      


      12.       PROVISIONS APPLICABLE TO
AWARDS.

      


      12.1.    Acceleration.  The
Administrator may, in its absolute discretion, without amendment to the Plan,
(i) accelerate the date on which any Award granted under the Plan becomes
exercisable, (ii) waive or amend the operation of Plan provisions respecting
exercise after termination of service or otherwise adjust any of the terms of
such Award and (iii) accelerate the Vesting Date, or waive any condition imposed
hereunder, with respect to any share of Restricted Stock or otherwise adjust any
of the terms applicable to such share.

      


      12.2.    Compliance with Section
162(m) of the Code.  Notwithstanding any provision of this Plan
to the contrary, if the Administrator determines that compliance with Section
162(m) of the Code is required or desired, all Awards granted under this Plan to
Named Executive Officers will comply with the requirements of Section 162(m) of
the Code.  In addition, in the event that changes are made to Section
162(m) of the Code to permit greater flexibility with respect to any Award or
Awards under this Plan, the Administrator may make any adjustments it deems
appropriate.

      



      
        
           


        

        
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                 12.3.     Performance Goals.  In
order to preserve the deductibility of an Award under Section 162(m) of the
Code, the Administrator may determine that any Award granted pursuant to this
Plan to a Participant that is or is expected to become a Covered Employee will
be determined solely on the basis of (a) the achievement by the Company or
Subsidiary of a specified target return, or target growth in return, on equity
or assets, (b) the Company’s stock price, (c) the Company’s total
shareholder return (stock price appreciation plus reinvested dividends) relative
to a defined comparison group or target over a specific performance period,
(d) the achievement by the Company or a Parent or Subsidiary, or a business
unit of any such entity, of a specified target, or target growth in, net income,
earnings per share, earnings before income and taxes, and earnings before
income, taxes, depreciation and amortization, or (e) any combination of the
goals set forth in (a) through (d) above, and will be subject to any
additional limitations set forth in Section 162(m) of the Code (including any
amendment to Section 162(m) of the Code) or any regulations or rulings issued
thereunder that are requirements for qualification as qualified
performance-based compensation as described in Section 162(m)(4)(C) of the Code,
and the Plan will be deemed amended to the extent deemed necessary by the
Administrator to conform to such requirements.  If an Award is made on
such basis, the Administrator will establish goals prior to the beginning of the
period for which such performance goal relates (or such later date as may be
permitted under Section 162(m) of the Code or the regulations thereunder but not
later than ninety (90) days after commencement of the period of services to
which the performance goal relates), and the Administrator has the right for any
reason to reduce (but not increase) the Award, notwithstanding the achievement
of a specified goal.  Any payment of an Award granted with performance
goals will be conditioned on the written certification of the Administrator in
each case that the performance goals and any other material conditions were
satisfied.

      


      In
addition, to the extent that Section 409A is applicable, (i) performance-based
compensation will also be contingent on the satisfaction of preestablished
organizational or individual performance criteria relating to a performance
period of at least twelve (12) consecutive months in which the Eligible
Participant performs services and (ii) performance goals will be established not
later than ninety (90) days after the beginning of any performance period to
which the performance goal relates, provided that the outcome is substantially
uncertain at the time the criteria are established.

      


      12.4.    Compliance with Section 409A
of the Code.  Notwithstanding any provision of this Plan to the
contrary, if any provision of this Plan or an Award Agreement contravenes any
regulations or Treasury guidance promulgated under Section 409A of the Code or
could cause an Award to be subject to the interest and penalties under Section
409A of the Code, such provision of this Plan or any Award Agreement will be
modified to maintain, to the maximum extent practicable, the original intent of
the applicable provision without violating the provisions of Section 409A of the
Code.  In addition, in the event that changes are made to Section 409A
of the Code to permit greater flexibility with respect to any Award under this
Plan, the Administrator may make any adjustments it deems
appropriate.

      


      12.5.    Section 280G of the
Code.  Notwithstanding any other provision of this Plan to the
contrary, unless expressly provided otherwise in the Award Agreement, if the
right to receive or benefit from an Award under this Plan, either alone or
together with payments that a Participant has a right to receive from the
Company, would constitute a "parachute payment" (as defined in Section 280G of
the Code), all such payments will be reduced to the largest amount that will
result in no portion being subject to the excise tax imposed by Section 4999 of
the Code. 

      



      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      12.6.    Cancellation of
Awards.  In the event a Participant’s Continuous Services has
been terminated for “Cause”, he or she will immediately forfeit all rights to
any and all Awards outstanding.  The determination by the Board that
termination was for Cause will be final and conclusive.  In making its
determination, the Board will give the Participant an opportunity to appear and
be heard at a hearing before the full Board and present evidence on the
Participant's behalf.  Should any provision to this Section be held to
be invalid or illegal, such illegality will not invalidate the whole of this
Section, but rather this Plan will be construed as if it did not contain the
illegal part or narrowed to permit its enforcement, and the rights and
obligations of the parties will be construed and enforced
accordingly.

      


      13.       PRIVILEGES OF STOCK
OWNERSHIP.  No Participant will have any of the rights of a
shareholder with respect to any Shares until the Shares are issued to the
Participant.  After Shares are issued to the Participant, the
Participant will be a shareholder and have all the rights of a shareholder with
respect to such Shares, including the right to vote and receive all dividends or
other distributions made or paid with respect to such Shares; provided, that if
such Shares are Restricted Stock, then any new, additional or different
securities the Participant may become entitled to receive with respect to such
Shares by virtue of a stock dividend, stock split or any other change in the
corporate or capital structure of the Company will be subject to the same
restrictions as the Restricted Stock.  The Company will issue (or
cause to be issued) such stock certificate promptly upon exercise of the
Award.  No adjustment will be made for a dividend or other right for
which the record date is prior to the date the stock certificate is
issued.

      


      14.       RESTRICTION ON
SHARES.  At the discretion of the Administrator, the Company
may reserve to itself and/or its assignee(s) in the Award Agreement that the
Participant not dispose of the Shares for a specified period of time, or that
the Shares are subject to a right of first refusal or a right to repurchase at
the Shares Fair Market Value at the time of sale.  The terms and
conditions of any such rights or other restrictions will be set forth in the
Award Agreement evidencing the Award.

      


      15.       CERTIFICATES.  All
certificates for Shares or other securities delivered under this Plan will be
subject to such stock transfer orders, legends and other restrictions as the
Administrator may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

      


      16.       ESCROW, PLEDGE OF
SHARES.  To enforce any restrictions on a Participant’s Shares,
the Administrator may require the Participant to deposit all certificates
representing Shares, together with stock powers or other instruments of transfer
approved by the Administrator, appropriately endorsed in blank, with the Company
or an agent designated by the Company to hold in escrow until such restrictions
have lapsed or terminated, and the Administrator may cause a legend or legends
referencing such restrictions to be placed on the certificates.  In
connection with any pledge of the Shares, the Participant will be required to
execute and deliver a written pledge agreement in such form, as the
Administrator will from time to time approve.

      



      
        
           


        

        
          15

          
            

          

        

        
           


        

      


      17.       SECURITIES LAW AND OTHER
REGULATORY COMPLIANCE.

      


      17.1.    Compliance With Applicable
Laws.  An Award will not be effective unless such Award is in
compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock exchange
or automated quotation system upon which the Shares may then be listed or
quoted, as they are in effect on the Grant Date and also on the date of exercise
or other issuance.  Notwithstanding any other provision in this Plan,
the Company will have no obligation to issue or deliver certificates for Shares
under this Plan prior to (i) obtaining any approvals from governmental agencies
that the Company determines are necessary or advisable; and/or (ii) completion
of any registration or other qualification of such Shares under any state or
federal laws or rulings of any governmental body that the Company determines to
be necessary or advisable.  The Company will be under no obligation to
register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state securities laws, stock
exchange or automated quotation system, and the Company will have no liability
for any inability or failure to do so.  Upon exercising all or any
portion of an Award, a Participant may be required to furnish representations or
undertakings deemed appropriate by the Company to enable the offer and sale of
the Shares or subsequent transfers of any interest in such Shares to comply with
applicable securities laws.  Evidences of ownership of Shares acquired
pursuant to an Award will bear any legend required by, or useful for purposes of
compliance with, applicable securities laws, this Plan or the Award
Agreement.

      


      17.2.    Rule 16b-3
Exemption.  During any time when the Company has a class of
equity security registered under Section 12 of the Exchange Act, it is the
intent of the Company that Awards pursuant to the Plan and the exercise of
Awards granted hereunder will qualify for the exemption provided by
Rule 16b-3 under the Exchange Act.  To the extent that any
provision of the Plan or action by the Board or the Administrator does not
comply with the requirements of Rule 16b-3, it will be deemed inoperative
to the extent permitted by law and deemed advisable by the Board or the
Administrator, and will not affect the validity of the Plan.  In the
event that Rule 16b-3 is revised or replaced, the Board or the
Administrator may exercise its discretion to modify this Plan in any respect
necessary to satisfy the requirements of, or to take advantage of any features
of, the revised exemption or its replacement.

      


      18.       NO OBLIGATION TO
EMPLOY.  Nothing in this Plan or any Award granted under this
Plan will confer or be deemed to confer on any Participant any right to continue
in the employ of, or to continue any other relationship with, the Company or to
limit in any way the right of the Company to terminate such Participant’s
employment or other relationship at any time, with or without
cause.

      


      19.       ADJUSTMENT FOR CHANGES IN
CAPITALIZATION.  The existence of outstanding Awards will not
affect the Company’s right to effect adjustments, recapitalizations,
reorganizations or other changes in its or any other corporation’s capital
structure or business, any merger or consolidation, any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Stock,
the dissolution or liquidation of the Company’s or any other corporation’s
assets or business or any other corporate act whether similar to the events
described above or otherwise.

      



      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      20.       DISSOLUTION, LIQUIDATION,
MERGER.

      


      20.1.    Company Not the
Survivor.  In the event of a dissolution or liquidation of the
Company, a merger, consolidation, combination or reorganization in which the
Company is not the surviving corporation, or a sale of substantially all of the
assets of the Company (as determined in the sole discretion of the Board), the
Administrator, in its absolute discretion, may cancel each outstanding Award
upon payment in cash or stock, or combination thereof, as determined by the
Board, to the Participant of the amount by which any cash and the fair market
value of any other property which the Participant would have received as
consideration for the Shares covered by the Award if the Award had been
exercised before such liquidation, dissolution, merger, consolidation,
combination, reorganization or sale exceeds the Exercise Price of the Award or
negotiate to have such option assumed by the surviving corporation and in its
absolute discretion, may accelerate the time within which each outstanding Award
may be exercised, provided however, that the Change of Control in Section 21
will control with respect to acceleration in vesting in the event of a merger,
consolidation, combination or reorganization that results in a change of control
as so defined.  The exercise or vesting of any Award that was
permissible solely by reason of this section and the applicable Award Agreement
will be conditioned upon the consummation of the applicable
event.  Upon consummation of such dissolution, liquidation, merger,
consolidation, combination, reorganization or sale of substantially all of the
assets, any outstanding but unexercised Options and SARs not otherwise canceled,
assumed or substituted as provided for above, will terminate.

      


      20.2.    Company is the
Survivor.  In the event of a merger, consolidation, combination
or reorganization in which the Company is the surviving corporation (“Survivor
Event”), the Board, as it was comprised before the Survivor Event, will
determine the appropriate adjustment of the number and kind of securities with
respect to which outstanding Awards may be exercised, and the exercise price at
which outstanding Awards may be exercised.  The Board will determine,
in its sole and absolute discretion, when the Company will be deemed to survive
for purposes of this Plan.

      


      21.       CHANGE OF
CONTROL.   The Administrator will have the authority, in
its absolute discretion exercisable either in advance of any actual or
anticipated “change of control” in the Company, to fully vest all outstanding
Awards.  A “change of control” will mean an event involving one
transaction or a related series of transactions, in which (i) the Company issues
securities equal to 50% or more of the Company’s issued and outstanding voting
securities, determined as a single class, to any individual, firm, partnership,
limited liability company, or other entity, including a “group” within the
meaning of Exchange Act Rule 13d-3, (ii) the Company issues voting securities
equal to 50% or more of the issued and outstanding voting stock of the Company
in connection with a merger, consolidation other business combination, (iii) the
Company is acquired in a merger, consolidation, combination or reorganization in
which the Company is not the surviving company, or (iv) all or substantially all
of the Company’s assets are sold or transferred.

      


      22.       DEFERRAL OF
AWARDS.  The Administrator may permit or require the deferral
of payment or settlement of any Stock Award subject to such rules and procedures
as it may establish.  Payment or settlement of Options or SARs may not
be deferred unless such deferral would not cause the provisions of Section 409A
of the Code to be violated.

      


      23.       NOTIFICATION OF ELECTION
UNDER SECTION 83(b) OF THE CODE.  If any Participant will, in
connection with the acquisition of shares of Company Stock under the Plan, make
the election permitted under Section 83(b) of the Code (i.e., an election to
include in gross income in the year of transfer the amounts specified in Section
83(b)), such Participant will notify the Company of such election within ten
days of filing notice of the election with the Internal Revenue Service, in
addition to any filing and notification required pursuant to regulations issued
under the authority of Code Section 83(b).

      



      
        
           


        

        
          17

          
            

          

        

        
           


        

      


      24.       TERMINATION;
AMENDMENT.  The Board may amend, suspend or terminate this Plan
at any time and for any reason; provided, however, that shareholder approval
will be required for the following types of amendments to this Plan: (i) any
increase in the Maximum Number of Shares, or the maximum number of Shares
available as incentive stock options, issuable under the Plan except for a
proportional increase in the Maximum Number or maximum number of Shares
available as incentive stock options, as a result of stock split or stock
dividend or (ii) a change in the class of Employees entitled to be granted
Incentive Stock Options. Further, the Board may, in its discretion, determine
that any amendment should be effective only if approved by the Shareholders even
if such approval is not expressly required by this Plan or by law.  No
Awards will be made after the termination of the Plan.  At any time
and from time to time, the Administrator may amend or modify any outstanding
Award or Award Agreement without approval of the Participant; provided, however,
that no amendment or modification of any Award will adversely affect any
outstanding Award without the written consent of the Participant; provided further,
however, that
the original term of any Award may not be extended unless it would not cause the
provisions of Section 409A to be violated. No termination,
amendment, or modification of the Plan will adversely affect any Award
previously granted under the Plan, without the written consent of the
Participant.  Notwithstanding any provision herein to the contrary,
the Administrator will have broad authority to amend this Plan or any
outstanding Award under this Plan without approval of the Participant to the
extent necessary or desirable (i) to comply with, or take into account changes
in, applicable tax laws, securities laws, accounting rules and other applicable
laws, rules and regulations, or (ii) to ensure that an Award is not subject to
interest and penalties under Section 409A of the Code or the excise tax imposed
by Section 4999 of the Code.

      


      25.       TRANSFERS UPON DEATH;
NONASSIGNABILITY.  Upon the death of a Participant outstanding
Awards granted to such Participant including Options, Stock and SARs may be
transferred and exercised only by the executor or administrator of the
Participant's estate or by a person who will have acquired the right to such
exercise by will or by the laws of descent and distribution in accordance with
and as provided for in this Plan.  No transfer of an Award by will or
the laws of descent and distribution will be effective to bind the Company
unless the Company will have been furnished with (a) written notice thereof and
with a copy of the will and/or such evidence as the Administrator may deem
necessary to establish the validity of the transfer and (b) an agreement by the
transferee to comply with all the terms and conditions of the Award that are or
would have been applicable to the Participant and to be bound by the
acknowledgments made by the Participant in connection with the grant of the
Award.  Except as otherwise provided, no Award or interest in it may
be transferred, assigned, pledged or hypothecated by the Participant, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process.

      


      26.       FAILURE TO
COMPLY.  In addition to the remedies of the Company elsewhere
provided for herein, failure by a Participant (or beneficiary) to comply with
any of the terms and conditions of the Plan or the applicable Award Agreement,
unless such failure is remedied by such Participant (or beneficiary) within ten
days after notice of such failure by the Administrator, will be grounds for the
cancellation and forfeiture of such Award, in whole or in part, as the
Administrator, in its sole discretion, may determine.

      


      27.       GOVERNING
LAW.  Except to the extent preempted by any applicable federal
law, this Plan and the rights of all persons under this Plan will be construed
in accordance with and under applicable provisions of the laws of the State of
Nevada, without reference to the principles of conflicts of laws
thereunder.

      



      
        
           


        

        
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      28.       MISCELLANEOUS.  Except
as specifically provided in a retirement or other benefit plan of the company or
a related entity, Awards will not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a related entity, and will not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. This
Plan is not a “retirement plan” or “welfare plan” under the Employee Retirement
Income Security Act of 1974, as amended.

      


      29.       DEFINITIONS.  As
used in this Plan, the following terms will have the following
meanings:

      


      “Administrator”
means the Committee appointed by the Board to administer this Plan or if there
is no such Committee, the Board itself.

      


      “Award”
means, individually and collectively, any award under this Plan, including any
Option, Restricted Stock Award, Unrestricted Stock Award or SAR.

      


      “Award
Agreement” means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions
of the Award.

      


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

      


      “Cause”
will mean, termination of employment of a Participant for cause under the
Company's generally applicable policies and procedures or, in the case of a
non-employee director of the Company, for circumstances which would constitute
cause if such policies and procedures were applicable.

      


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

      


      “Committee”
means the Committee appointed by the Board to administer this Plan.

      


      “Company”
means Golden Phoenix Minerals, Inc., a Nevada corporation, or any successor
corporation, and its Subsidiary as the context so warrants.

      


      “Continuous
Service” means that the provision of services to the Company or a Subsidiary in
any capacity of employee, director or consultant that is not interrupted or
terminated.  Continuous Service will 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 Subsidiary, or any successor, in any
capacity of employee, director or consultant, or (iii) any change in status as
long as the individual remains in the service of the Company or a Subsidiary in
any capacity of employee, director or consultant (except as otherwise provided
in the Award Agreement).  An approved leave of absence will include
sick leave, maternity or paternity leave, military leave, or any other
authorized personal leave as determined by the Administrator.  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.

      


      “Covered
Employee” means a covered employee as defined in Section 162(m)(3) of the Code,
provided that no employee will be a Covered Employee until the deduction
limitations of Section 162(m) of the Code are applicable to the Company and any
reliance period under Treasury Regulation Section 1.162-27(f) has
expired.

      



      
        
           


        

        
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      “Disability”
or “Disabled” means a disability covered under a long-term disability plan of
the Company applicable to a Participant.  The Committee may require
such medical or other evidence as it deems necessary to judge the nature and
permanency of the Participant’s condition. Notwithstanding the above, (i) with
respect to an Incentive Stock Option, “Disability” or “Disabled” will mean
permanent and total disability as defined in Section 22(e)(3) of the Code and
(ii) to the extent an Option is subject to Section 409A of the Code, and payment
or settlement of the Option is to be accelerated solely as a result of the
Eligible Participant's Disability, Disability will have the meaning ascribed
thereto under Section 409A of the Code and the Treasury guidance promulgated
thereunder.

      


      “Effective
Date” has the meaning set forth in Section 2.

      


      “Eligible
Person” means any director, officer or employee of the Company or other person
who, in the opinion of the Committee, is rendering valuable services to the
Company, including without limitation, an independent contractor, outside
consultant, or advisor to the Company.

      


      “Employee”
means any and all employees of the Company or a Subsidiary.

      


      “Exchange
Act” means the Securities Exchange Act of 1934, as amended from time to time and
any successor statute.

      


      “Exercise
Agreement” has the meaning set forth in Section 6.2.4.

      


      “Exercise
Price” means the price at which a holder of an Option may purchase the Shares
issuable upon exercise of the Option.

      


      “Fair
Market Value” means the fair market value of the Stock at the date of grant as
determined in good faith by the Administrator.  By way of
illustration, but not limitation, for this purpose, good faith will be met if
the Administrator employs the following methods:

      


      (i)         Listed Stock. If the
Stock is traded on any established stock exchange or quoted on a national market
system, fair market value will be the closing sales price for the Stock as
quoted on that stock exchange or system for the date the value is to be
determined (the “Value Date”).  If no sales are reported as having
occurred on the Value Date, fair market value will be that closing sales price
for the last preceding trading day on which sales of Stock is reported as having
occurred.  If no sales are reported as having occurred during the five
(5) trading days before the Value Date, fair market value will be the closing
bid for Stock on the Value Date.  If Stock is listed on multiple
exchanges or systems, fair market value will be based on sales or bids on the
primary exchange or system on which Stock is traded or quoted.

      


      (ii)        Stock Quoted by Securities
Dealer. If Stock is regularly quoted by a recognized securities dealer
but selling prices are not reported on any established stock exchange or quoted
on a national market system, fair market value will be the mean between the high
bid and low asked prices on the Value Date.  If no prices are quoted
for the Value Date, fair market value will be the mean between the high bid and
low asked prices on the last preceding trading day on which any bid and asked
prices were quoted.

      


      (iii)       No Established
Market. If Stock is not traded on any established stock exchange or
quoted on a national market system and are not quoted by a recognized securities
dealer, the Administrator will determine fair market value in good
faith.  The Administrator will consider the following factors, and any
others it considers significant, in determining fair market value: 
(X) the
price at which other securities of the Company have been issued to purchasers
other than employees, directors, or consultants, (Y) the Company’s net
worth, prospective earning power, dividend-paying capacity, and non-operating
assets, if any, and (Z) any other relevant factors, including the economic
outlook for the Company and the Company’s industry, the Company’s position in
that industry, the Company’s goodwill and other intellectual property, and the
values of securities of other businesses in the same industry.

      
 

      
        
           

        

        
          20

          
            

          

        

        
           

        

         

      

      (iv)       Additional
Valuation.  Methods for Publicly Traded
Companies.  Any valuation method permitted under Section 20.2031-2 of
the Estate Tax Regulations.

      


      (v)        Non-Publicly Traded
Stock.  For non-publicly traded stock, the fair market value of
the Stock at the Grant Date based on an average of the fair market values as of
such date set forth in the opinions of completely independent and well-qualified
experts (the Participant’s status as a majority or minority shareholder may be
taken into consideration).

      


      Regardless of whether the Stock offered
under the Award is publicly traded, a good faith attempt for this purpose will
not be met unless the fair market value of the Stock on the Grant Date is
determined with regard to nonlapse restrictions (as defined in Section 1.83-3(h)
of the Treasury Regulations) and without regard to lapse restrictions (as
defined in Section 1.83-3(i) of the Treasury Regulations).

      


      “Incentive
Stock Option” means an Option within the meaning of Section 422 of the
Code.

      


      “Issue
Date” will mean the date established by the Administrator on which Certificates
representing shares of Restricted Stock will be issued by the Company pursuant
to the terms of this Plan.

      


      “Named
Executive Officer” means, if applicable, a Participant who, as of the date of
vesting and/or payout of an Award is one of the group of “covered employees,” as
defined in the regulations promulgated under Section 162(m) of the Code, or any
successor statute.

       

      “Non-Qualified
Stock Option” means an Option which is not an Incentive Stock
Option.

       

      “Officer”
means an officer of the Company and an officer who is subject to Section 16 of
the Exchange Act.

      


      “Option”
means an award of an option to purchase Shares pursuant to Section
6.

      


      “Optionee”
means the holder of an Option.

      


      “Participant”
means a person who receives an Award under this Plan.

      


      “Plan”
means this Golden Phoenix Minerals, Inc. 2007 Equity Incentive Plan, as amended
from time to time.

      


      “Restricted
Stock Award” means an award of Shares pursuant to Section 7.

      


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

      



      
        
           


        

        
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      “SAR”
means a stock appreciation right entitling the Participant Shares or cash
compensation, as established by the Administrator, measured by appreciation in
the value of shares of Stock of the Company as provided for in Section
9.

      


      “SEC”
means the Securities and Exchange Commission.

      


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

      


      “Shares”
means shares of the Company’s Stock reserved for issuance under this Plan, as
adjusted pursuant to this Plan, and any successor security.

      


      “Stock”
means the Common Stock, $.001 par value, of the Company, and any successor
entity.

      


      “Stock
Award” means an Award of Restricted Stock or Unrestricted Stock.

      


      “Subsidiary”
means any corporation in an unbroken chain of corporations beginning with the
Company if, at the time of granting of an Award, each of the corporations other
than the last corporation in the unbroken chain owns stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.

      


      “Ten
Percent Shareholder” has the meaning set forth in Section 6.2.2.

      


      “Termination”
or “Terminated” means, for purposes of this Plan with respect to a Participant,
that the Participant has for any reason ceased to provide services as an
employee, officer, director, consultant, independent contractor or advisor of
the Company.  An employee will not be deemed to have ceased to provide
services in the case of (i) sick leave, (ii) military leave, or (iii) any other
leave of absence approved by the Administrator; provided, that such leave is for
a period of not exceeding three (3) months, or if longer, so long as
reemployment with the Company granting the option or the corporation assuming or
substituting an option under Section 1.424-1(a) upon the expiration of such
leave is guaranteed by contract or statute.

      


      “Unrestricted
Stock Award” means an award of Shares pursuant to Section 8.

      


      "Vesting
Date" will mean the date established by the Administrator on which a Share of
Restricted Stock may vest.

       

       

      
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