Exhibit 10.1


SECURECARE
TECHNOLOGIES, INC.


2008 STOCK OPTION
PLAN


ARTICLE 1. THE PLAN


1.1 Title. This plan is entitled the
“2008 Stock Option Plan” (the “Plan”) of SecureCare Technologies, Inc., a
Nevada corporation (the “Company”).


1.2 Purpose. The purpose of the Plan
is to enhance the long-term stockholder value of the Company by offering
opportunities to senior management of the Company and any Related Company, as
defined below, to acquire and maintain stock ownership in the Company in order
to give senior management the opportunity to participate in the Company’s
growth and success, and to encourage them to remain in the service of the
Company or a Related Company. 


ARTICLE 2. DEFINITIONS


The following terms will have the following meanings
in the Plan:


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


“Cause,” unless otherwise defined in the instrument
evidencing the award or in an employment or services agreement between the
Company or a Related Company and a Participant, means a material breach of the
employment or services agreement, dishonesty, fraud, misconduct, unauthorized
use or disclosure of confidential information or trade secrets, or conviction
or confession of any felony or misdemeanor involving moral turpitude where all
right of appeal shall have been exhausted or shall have lapsed, in each case as
determined by the Plan Administrator, and its determination shall be conclusive
and binding. Where the Optionee has an employment or consulting agreement with
the Company, the definition of “cause” in such agreement shall be incorporated
herein as well as in any option granted to the Optionee hereunder and shall be
controlling.


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


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


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


	
 

	
 


	
 

	
(a) a merger or consolidation of the Company with or
 into any other corporation, entity or person or


	
 

	
 


	
 

	
(b) a sale, lease, exchange or other transfer in one
 transaction or a series of related transactions of all or substantially all the
 Company’s outstanding securities or all or substantially all the Company’s
 assets; provided, however, that a Corporate Transaction shall not include a
 Related Party Transaction.












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


“Employment Termination Date” means, with respect to a
Participant, the first day upon which the Participant no longer has an
employment or service relationship with the Company or any Related Company. 


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


“Fair Market Value” means the per share value of the
Common Stock determined as follows (a) if the Common Stock is listed on an
established stock exchange or exchanges or the NASDAQ National Market, the
closing price per share on the last trading day immediately preceding such date
on the principal exchange on which it is traded or as reported by NASDAQ; (b)
if the Common Stock is not then listed on an exchange or the NASDAQ National
Market, but is quoted on the NASDAQ Small Cap Market, the NASDAQ electronic
bulletin board or the National Quotation Bureau pink sheets, the average of the
closing bid and ask prices per share for the Common Stock as quoted by NASDAQ
or the National Quotation Bureau, as the case may be, on the last trading day
immediately preceding such date, or if it is available, the price of the last
actual trade is to be used on the last trading day immediately preceding such
date; or (c) if there is no such reported market for the Common Stock for the
date in question, then an amount determined in good faith by the Plan
Administrator.


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


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


“Non-qualified Stock Option” means an Option other
than an Incentive Stock Option.


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


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


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






“Participant” means the person to whom an Option is
granted and who meets the eligibility requirements imposed by Article 5.


“Plan Administrator” has the meaning set forth in
Article 3.1.


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


“Related Party Transaction” means (a) a merger or
consolidation of the Company in which the holders of shares of Common Stock
immediately prior to the merger hold at least a majority of the shares of
Common Stock in the Successor Corporation immediately after the merger; (b) a
sale, lease, exchange or other transaction in one transaction or a series of
related transactions of all or substantially all the Company’s assets to a
wholly-owned subsidiary corporation; (c) a mere reincorporation of the Company;
or (d) a transaction undertaken for the sole purpose of creating a holding
company that will be owned in substantially the same proportion by the persons
who held the Company’s securities immediately before such transaction. 


“Retirement,” unless otherwise defined by the Plan
Administrator from time to time for purposes of the Plan, means retirement on
or after the individual’s normal retirement date under the Company’s 401(k)
plan or other similar successor plan applicable to salaried employees. 


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


“Successor Corporation” has the meaning set forth in
Article 11.3.1. 


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


ARTICLE 3. ADMINISTRATION


3.1 Plan Administrator. The Plan shall
be administered by the Board or a committee appointed by, and consisting of two
or more members of, the Board (the “Plan Administrator”). If and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act,
the Board shall consider in selecting the members of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a)
“outside directors” as contemplated by Section 162(m) of the Code and (b)
“non-employee directors” as contemplated by Rule 16b-3 under the Exchange Act.
Committee members shall serve for such term as the Board may determine, subject
to removal by the Board at any time. At any time when no committee has been
appointed to administer the Plan, then the Board will be the Plan Administrator.







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


ARTICLE 4. STOCK SUBJECT TO THE PLAN


4.1 Authorized Number of Shares.
Subject to adjustment from time to time as provided in Article 11.1, the number
of shares of Common Stock available for issuance under the Plan shall be
425,000 shares.


4.2 Reuse of Shares. Any shares of
Common Stock that have been made subject to an Option that cease to be subject
to the Option (other than by reason of exercise or settlement of the Option to
the extent it is exercised for or settled in shares) shall again be available
for issuance in connection with future grants of Options under the Plan. In the
event shares issued under the Plan are reacquired by the Company pursuant to
any forfeiture provision or right of repurchase, such shares shall again be
available for the purposes of the Plan; provided, however, that the maximum
number of shares that may be issued upon the exercise of Incentive Stock
Options shall equal the share number stated in Article 4.1, subject to
adjustment from time to time as provided in Article 11.1; and provided,
further, that for purposes of Article 4.3, any such shares shall be counted in
accordance with the requirements of Section 162(m) of the Code. 


4.3 Limitations. Subject to adjustment
from time to time as provided in Article 11.1, not more than an aggregate of
500,000 shares shall be available for issuance pursuant to grants of Stock
Options under the Plan.


ARTICLE 5. ELIGIBILITY


          An
Option may be granted to any officer or employee of the Company or a Related
Company that the Plan Administrator from time to time selects. 


ARTICLE 6. OPTIONS


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


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






ARTICLE 7. GRANTS OF OPTIONS


7.1 Grant of Options. The Plan
Administrator shall have the authority, in its sole discretion, to grant
Options as Incentive Stock Options or as Non-qualified Stock Options, which
shall be appropriately designated. 


7.2 Option Exercise Price. The
exercise price for shares purchased under an Option shall be as determined by
the Plan Administrator, provided that: 


	
 

	
 


	
 

	
(a) the exercise price for Options granted to
 Participants shall not be less than the minimum exercise price required by
 Article 8.3 with respect to Incentive Stock Options and shall not be less
 than 85% of Fair Market Value of the Common Stock on the Grant Date with
 respect to Non-qualified Stock Options;





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


7.4 Exercise of Options. The Plan
Administrator shall establish and set forth in each instrument that evidences
an Option the time at which, or the installments in which, the Option shall
vest and become exercisable, any of which provisions may be waived or modified
by the Plan Administrator at any time. The Plan Administrator, in its sole
discretion, may adjust the vesting schedule of an Option held by a Participant
who works less than “full-time” as that term is defined by the Plan
Administrator or who takes a Company-approved leave of absence. To the extent
an Option has vested and become exercisable, the Option may be exercised in
whole or from time to time in part by delivery to the Company of a written
stock option exercise agreement or notice, in a form and in accordance with
procedures established by the Plan Administrator, setting forth the number of
shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement, if any, and such
representations and agreements as may be required by the Plan Administrator,
accompanied by payment in full as described in Article 7.5. An Option may be
exercised only for whole shares and may not be exercised for less than a
reasonable number of shares at any one time, as determined by the Plan
Administrator.


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






	
 

	
 


	
 

	
(a) cash;


	
 

	
 


	
 

	
(b) check;


	
 

	
 


	
 

	
(c) tendering (either actually or, if the Common
 Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by
 attestation) shares of Common Stock already owned by the Participant for at
 least six months (or any shorter period necessary to avoid a charge to the
 Company’s earnings for financial reporting purposes) that on the day prior to
 the exercise date have a Fair Market Value equal to the aggregate exercise
 price of the shares being purchased under the Option; (d) if the Common Stock
 is registered under Section 12(b) or 12(g) of the Exchange Act, delivery of a
 properly executed exercise notice, together with irrevocable instructions to
 a brokerage firm designated by the Company to deliver promptly to the Company
 the aggregate amount of sale or loan proceeds to pay the Option exercise
 price and any withholding tax obligations that may arise in connection with
 the exercise, all in accordance with the regulations of the Federal Reserve
 Board; or (e) surrendering unexercised options with an intrinsic value
 (Market Value on date of exercise of underlying shares minus exercise price
 of options surrendered) equal to the exercise price of the options being
 exercised. 





7.6 Post-Termination Exercises. The
Plan Administrator shall establish and set forth in each instrument that
evidences an Option whether the Option shall continue to be exercisable, and
the terms and conditions of such exercise, if the Participant ceases to be
employed by, or to provide services to, the Company or a Related Company, which
provisions may be waived or modified by the Plan Administrator at any time. If
not so established in the instrument evidencing the Option, the Option shall be
exercisable according to the following terms and conditions, which may be
waived or modified by the Plan Administrator at any time: 


	
 

	
 


	
 

	
(a) Except as otherwise set forth in this Article
 7.6, any portion of an Option that is not vested and exercisable on the
 Employment Termination Date shall expire on such date.


	
 

	
 


	
 

	
(b) Any portion of an Option that is vested and
 exercisable on the Employment Termination Date shall expire on the earliest
 to occur of:





                    (i)
if the Participant’s Employment Termination Date occurs for reasons other than
Cause, Retirement, Disability or death, the day which is three months after
such Employment Termination Date;


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


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


          Notwithstanding
the foregoing, if the Participant dies after his or her Employment Termination
Date but while an Option is otherwise exercisable, the portion of the Option
that is vested and exercisable on such Employment Termination Date shall expire
upon the earlier to occur of (1) the Option Expiration Date and (2) the
one-year anniversary of the date of death, unless the Plan Administrator
determines otherwise.






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


	
 

	
 


	
 

	
(c) A Participant’s transfer of employment or
 service relationship between or among the Company and any Related Company, or
 a change in status from an employee to a consultant, agent, advisor or
 independent contractor or a change in status from a consultant, agent, advisor
 or independent contractor to an employee, shall not be considered a
 termination of employment or service relationship for purposes of this
 Article 7. Unless the Plan Administrator determines otherwise, a termination
 of employment or service relationship shall be deemed to occur if a
 Participant’s employment or service relationship is with an entity that has
 ceased to be a Related Company. 


	
 

	
 


	
 

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


	
 

	
 


	
 

	
(e) If a Participant’s employment or service
 relationship with the Company or a Related Company terminates by reason of
 Disability or death, the Option shall become fully vested and exercisable for
 all the shares subject to the Option. Such Option shall remain exercisable
 for the time period set forth in this Article 7.6.


	
 

	
 


	
 

	
(f) Notwithstanding anything herein to the contrary,
 if the Optionee has an employment or consulting agreement with the Company,
 any provisions relating to the effect of termination on granted options in
 such agreement shall be incorporated herein as well as in any option granted
 to the Optionee hereunder and shall be controlling.





ARTICLE 8. INCENTIVE STOCK OPTION
LIMITATIONS


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


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






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


8.3 Exercise Price. The exercise price
of an Incentive Stock Option shall be at least 100% of the Fair Market Value of
the Common Stock on the Grant Date, and in the case of an Incentive Stock
Option granted to a Participant who owns more than 10% of the total combined
voting power of all classes of the stock of the Company or of its parent or
subsidiary corporations (a “Ten Percent Stockholder”), shall not be less than
110% of the Fair Market Value of the Common Stock on the Grant Date. The
determination of more than 10% ownership shall be made in accordance with
Section 422 of the Code. 


8.4 Exercisability. An Option
designated as an Incentive Stock Option shall cease to qualify for favorable
tax treatment as an Incentive Stock Option to the extent it is exercised (if
permitted by the terms of the Option) (a) more than three months after the
Employment Termination Date if termination was for reasons other than death or
disability, (b) more than one year after the Employment Termination Date if
termination was by reason of disability, or (c) after the Participant has been
on leave of absence for more than 90 days, unless the Participant’s
re-employment rights are guaranteed by statute or contract.


8.5 Taxation of Incentive Stock Options. In
order to obtain certain tax benefits afforded to Incentive Stock Options under
Section 422 of the Code, the Participant must hold the shares acquired upon the
exercise of an Incentive Stock Option for two years after the Grant Date and
one year after the date of exercise. A Participant may be subject to the
alternative minimum tax at the time of exercise of an Incentive Stock Option.
The Participant shall give the Company prompt notice of any disposition of
shares acquired on the exercise of an Incentive Stock Option prior to the
expiration of such holding periods. 


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


ARTICLE 9. WITHHOLDING


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


9.2 Payment of Withholding Obligations in Cash or Shares.
The Plan Administrator may permit or require a Participant to satisfy all or
part of his or her tax withholding obligations by (a) paying cash to the
Company, (b) having the Company withhold from any cash amounts otherwise due or
to become due from the Company to the Participant, (c) having the Company
withhold a portion of any shares of Common Stock that would otherwise be issued
to the Participant having a value equal to the tax withholding obligations (up
to the employer’s minimum required tax withholding rate), or (d) surrendering
any shares of Common Stock that the Participant previously acquired having a
value equal to the tax withholding obligations (up to the employer’s minimum
required tax withholding rate to the extent the Participant has held the
surrendered shares for less than six months). 






ARTICLE 10. ASSIGNABILITY


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


ARTICLE 11. ADJUSTMENTS


11.1 Adjustment of Shares. In the
event, at any time or from time to time, a stock dividend, stock split,
spin-off, combination or exchange of shares, recapitalization, merger,
consolidation, distribution to stockholders other than a normal cash dividend,
or other change in the Company’s corporate or capital structure, including,
without limitation, a Related Party Transaction, results in (a) the outstanding
shares of Common Stock, or any securities exchanged therefore or received in
their place, being exchanged for a different number or kind of securities of
the Company or of any other corporation or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator
shall make proportional adjustments in (i) the maximum number and kind of
securities subject to the Plan and issuable as Incentive Stock Options as set
forth in Article 4 and the maximum number and kind of securities that may be
made subject to Options and to Options to any individual as set forth in
Article 4.3, and (ii) the number and kind of securities that are subject to any
outstanding Award and the per share price of such securities, without any
change in the aggregate price to be paid therefore. The determination by the
Plan Administrator as to the terms of any of the foregoing adjustments shall be
conclusive and binding. Notwithstanding the foregoing, a dissolution or
liquidation of the Company or a Corporate Transaction shall not be governed by
this Article 11.1 but shall be governed by Articles 11.2 and 11.3,
respectively.


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






11.3 Corporate Transactions and their effect on Options. 


	
 

	
 


	
 

	
(a) In the event of a Corporate Transaction, except
 as otherwise provided in the instrument evidencing an Option (or in a written
 employment or services agreement between a Participant and the Company or
 Related Company) and except as provided in subsection (b) below, each
 outstanding Option shall be assumed or an equivalent option or right
 substituted by the surviving corporation, the successor corporation or its
 parent corporation, as applicable (the “Successor Corporation”).


	
 

	
 


	
 

	
(b) If, in connection with a Corporate Transaction,
 the Successor Corporation refuses to assume or substitute for an Option, then
 each such outstanding Option shall become fully vested and exercisable with
 respect to 100% of the un-vested portion of the Option. In such case, the
 Plan Administrator shall notify the Participant in writing or electronically
 that the un-vested portion of the Option specified above shall be fully
 vested and exercisable for a specified time period. At the expiration of the
 time period, the Option shall terminate, provided that the Corporate
 Transaction has occurred.


	
 

	
 


	
 

	
(c) For the purposes of this Article 11.3, the
 Option shall be considered assumed or substituted for if following the
 Corporate Transaction the option or right confers the right to purchase or
 receive, for each share of Common Stock subject to the Option immediately
 prior to the Corporate Transaction, the consideration (whether stock, cash,
 or other securities or property) received in the Corporate Transaction by
 holders of Common Stock for each share held on the effective date of the
 transaction (and if holders were offered a choice of consideration, the type
 of consideration chosen by the holders of a majority of the outstanding
 shares); provided, however, that if such consideration received in the
 Corporate Transaction is not solely common stock of the Successor
 Corporation, the Plan Administrator may, with the consent of the Successor
 Corporation, provide for the consideration to be received upon the exercise
 of the Option, for each share of Common Stock subject thereto, to be solely
 common stock of the Successor Corporation substantially equal in fair market
 value to the per share consideration received by holders of Common Stock in
 the Corporate Transaction. The determination of such substantial equality of
 value of consideration shall be made by the Plan Administrator and its
 determination shall be conclusive and binding.


	
 

	
 


	
 

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












11.4 Further Adjustment of Options.  Subject to Articles 11.2 and 11.3, the Plan
Administrator shall have the discretion, exercisable at any time before a sale,
merger, consolidation, reorganization, liquidation or change of control of the
Company, as defined by the Plan Administrator, to take such further action as
it determines to be necessary or advisable, and fair and equitable to the
Participants, with respect to Options. Such authorized action may include (but
shall not be limited to) establishing, amending or waiving the type, terms,
conditions or duration of, or restrictions on, Options so as to provide for
earlier, later, extended or additional time for exercise, lifting restrictions
and other modifications, and the Plan Administrator may take such actions with
respect to all Participants, to certain categories of Participants or only to
individual Participants. The Plan Administrator may take such action before or
after granting Options to which the action relates and before or after any
public announcement with respect to such sale, merger, consolidation,
reorganization, liquidation or change of control that is the reason for such
action.


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


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


ARTICLE 12. AMENDMENT AND TERMINATION


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


12.2 Term of Plan. Unless sooner
terminated as provided herein, the Plan shall terminate ten years after the
earlier of the Plan’s adoption by the Board and approval by the stockholders. 


12.3 Consent of Participant. The
suspension, amendment or termination of the Plan or a portion thereof or the
amendment of an outstanding Option shall not, without the Participant’s
consent, materially adversely affect any rights under any Option theretofore
granted to the Participant under the Plan. Any change or adjustment to an
outstanding Incentive Stock Option shall not, without the consent of the
Participant, be made in a manner so as to constitute a “modification” that
would cause such Incentive Stock Option to fail to continue to qualify as an
Incentive Stock Option. Notwithstanding the foregoing, any adjustments made
pursuant to Article 12 shall not be subject to these restrictions. 






ARTICLE 13. GENERAL


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



13.2 No Individual Rights. Nothing in
the Plan or any Option granted under the Plan shall be deemed to constitute an
employment contract or confer or be deemed to confer on any Participant any
right to continue in the employ of, or to continue any other relationship with,
the Company or any Related Company or limit in any way the right of the Company
or any Related Company to terminate a Participant’s employment or other
relationship at any time, with or without Cause. 


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


13.4 No Obligation to Register Shares.  The Company shall be under no obligation
to any Participant to register for offering or resale or to qualify for
exemption under the Securities Act, or to register or qualify under state
securities laws, any shares of Common Stock, security or interest in a security
paid or issued under, or created by, the Plan, or to continue in effect any
such registrations or qualifications if made. The Company may issue
certificates for shares with such legends and subject to such restrictions on
transfer and stop-transfer instructions as counsel for the Company deems
necessary or desirable for compliance by the Company with federal and state
securities laws. To the extent the Plan or any instrument evidencing an Option
provides for issuance of stock certificates to reflect the issuance of shares
of Common Stock, the issuance may be effected on a non-certificated basis, to
the extent not prohibited by applicable law or the applicable rules of any
stock exchange. 


13.5 No Rights as a Stockholder. No
Option or Stock Option denominated in units shall entitle the Participant to
any cash dividend, voting or other right of a stockholder unless and until the
date of issuance under the Plan of the shares that are the subject of such
Option.


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






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


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


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


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


ARTICLE 14. EFFECTIVE DATE


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