exh10-1_2007stockplan.htm


     

    
      

      

    

     

     

     

     

     

     

     

     

     

     

    EXHIBIT
      10.1

     

    2007
      STOCK OPTION PLAN


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    PATCH
      INTERNATIONAL INC.

     

    2007
      STOCK OPTION PLAN

     

    1.           Purpose

     

    The
      purpose of the stock option plan (the “Plan”) of PATCH
      INTERNATIONAL INC., a corporation incorporated under the laws of the State
      of
      Nevada (the “Corporation”) is to advance the interests of the
      Corporation by encouraging the directors, officers, employees and consultants
      of
      the Corporation, and of its subsidiaries and affiliates, if any, to acquire
      common shares in the share capital of the Corporation (the
“Shares”), thereby increasing their proprietary interest in the
      Corporation, encouraging them to remain associated with the Corporation and
      furnishing them with additional incentive in their efforts on behalf of the
      Corporation in the conduct of its affairs.

     

    Stock
      options granted under this Plan that qualify under Section 422 of the
      Internal Revenue Code of 1986, as amended (the “Code”), are
      referred to in this Plan as “Incentive Stock
      Options.”  Incentive Stock Options and stock options that do
      not qualify under Section 422 of the Code are referred to in this Plan as
“Non-Qualified Stock Options”.

     

    2.           Administration

     

    The
      Plan
      shall be administered by the board of directors of the Corporation or by a
      special committee of the directors appointed from time to time by the board
      of
      directors of the Corporation pursuant to rules of procedure fixed by the board
      of directors (such committee or, if no such committee is appointed, the Board
      of
      Directors of the Corporation, is hereinafter referred to as the
“Board”).  A majority of the Board shall constitute a
      quorum, and the acts of a majority of the directors present at any meeting
      at
      which a quorum is present, or acts unanimously approved in writing, shall be
      the
      acts of the directors.

     

    If
      and so
      long as the Shares are registered under Section 12(b) or 12(g) of the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), the
      Board shall consider in selecting the membership of any special committee of
      the
      directors, 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.

     

    Subject
      to the provisions of the Plan, the Board shall have authority to construe and
      interpret the Plan and all option agreements entered into thereunder, to define
      the terms used in the Plan and in all option agreements entered into thereunder,
      to prescribe, amend and rescind rules and regulations relating to the Plan
      and
      to make all other determinations necessary or advisable for the administration
      of the Plan.  All determinations and interpretations made by the Board
      shall be binding and conclusive on all participants in the Plan and on their
      legal personal representatives and beneficiaries.

     

    Each
      option granted hereunder may be evidenced by an agreement in writing, signed
      on
      behalf of the Corporation and by the optionee, in such form as the Board shall
      approve.  Each such agreement shall recite that it is subject to the
      provisions of this Plan.

     

    3.           Applicable
      Laws

     

    All
      options granted pursuant to this Plan shall at all times be subject to all
      legal
      requirements relating to the administration of stock option plans, if any,
      under
      applicable corporate laws, applicable 

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      securities
        laws, the Code, the rules of any applicable stock exchange or stock quotation
        system (hereinafter collectively referred to as, the
“Exchange”), the rules of any foreign jurisdiction applicable
        to the Plan and any options granted hereunder to residents of that jurisdiction
        and any other regulatory body having jurisdiction hereinafter (collectively,
        the
“Applicable Laws”).

    

     

    4.           Shares
      Subject to Plan

     

    Subject
      to adjustment as provided in Section 16 hereof, the Shares to be offered under
      the Plan shall consist of common shares of the Corporation’s authorized but
      unissued common shares.  The aggregate number of Shares issuable upon
      the exercise of all options granted under the Plan shall not exceed ten (10%)
      percent of the issued and outstanding common shares of the Corporation from
      time
      to time.  If any option granted hereunder shall expire or terminate
      for any reason in accordance with the terms of the Plan without being exercised,
      the unpurchased Shares subject thereto shall again be available for the purpose
      of this Plan.

     

    5.           Maintenance
      of Sufficient Capital

     

    The
      Corporation shall at all times during the term of the Plan reserve and keep
      available such numbers of Shares as will be sufficient to satisfy the
      requirements of the Plan.

     

    6.           Eligibility
      and Participation

     

    Directors,
      officers, consultants, and employees of the Corporation or its subsidiaries,
      and
      employees of a person or company which provides management services to the
      Corporation or its subsidiaries (“Management Company
      Employees”) shall be eligible for selection to participate in the Plan
      (such persons hereinafter collectively referred to as
“Participants”).  Subject to compliance with the
      Applicable Laws, Participants may elect to hold options granted to them in
      an
      incorporated entity wholly owned by them and such entity shall be bound by
      the
      Plan in the same manner as if the options were held by the
      Participant.

     

    Incentive
      Stock Options may be granted to any individual who is an employee of the
      Corporation or any corporation (other than the Corporation) that is a
“Parent Corporation” of the Corporation or “Subsidiary
      Corporation” of the Corporation, as those terms are defined in
      Sections 424(e) and 424(f), respectively, of the Code (or any successor
      provisions) and the regulations thereunder (as amended from time to
      time)(“Related Corporation”).

     

    Non-Qualified
      Stock Options may be granted to employees and to such other persons, including
      directors and officers of the Corporation or any Related Corporation who are
      not
      employees, subject to any Applicable Laws.

     

    Subject
      to the terms hereof, the Board shall determine to whom options shall be granted
      and whether the Option is an Incentive Stock Option or a Non-Qualified Stock
      Option, the terms and provisions of the respective option agreements, the time
      or times at which such options shall be granted and vested, and the number
      of
      Shares to be subject to each option.  In the case of employees or
      consultants of the Corporation or Management Company Employees, the option
      agreements to which they are party must contain a representation of the
      Corporation that such employee, consultant or Management Company Employee,
      as
      the case may be, is a bona fide employee, consultant or Management Company
      Employee of the Corporation or its subsidiaries.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    A
      Participant who has been granted an option may, if such Participant is otherwise
      eligible, and if permitted under the Applicable Laws, be granted an additional
      option or options if the Board shall so determine.

     

    7.           Exercise
      Price

     

    
      	
              (a)

            	
              The
                exercise price of the Shares subject to each option shall be determined
                by
                the Board, subject to applicable Exchange approval, at the time any
                option
                is granted.  In no event shall such exercise price be lower than
                the exercise price permitted by the Applicable
                Laws.

            


    

     

    
      	
              (b)

            	
              The
                exercise price for an Incentive Stock Option or any option granted
                to a
                “covered employee” as such term is defined for purposes of
                Section 162(m) of the Code shall not be less than the fair market
                value of the Shares at the time the option is granted as determined
                by the
                Board in good faith.

            


    

     

    
      	
              (c)

            	
              With
                respect to Incentive Stock Options granted to greater-than-ten percent
                (>10%) shareholders of the Corporation (as determined with reference
                to
                Section 424(d) of the Code), the exercise price per share shall not
                be less than one hundred ten percent (110%) of the fair market value
                per
                Share at the time the option is granted as determined by the Board
                in good
                faith.

            


    

     

    
      	
              (d)

            	
              Once
                the exercise price has been determined by the Board, accepted by
                the
                applicable Exchange and the option has been granted, the exercise
                price of
                an option may be reduced (if allowed by the Applicable Laws) upon
                receipt
                of Board approval, provided that in the case of options held by insiders
                of the Corporation (as defined in the policies of the applicable
                Exchange), the exercise price of an option may be reduced only if
                disinterested shareholder approval is
                obtained.

            


    

     

    8.           Number
      of Optioned Shares

     

    
      	
              (a)

            	
              The
                number of Shares subject to an option granted to any one Participant
                shall
                be determined by the Board, but no one Participant shall be granted
                an
                option which exceeds the maximum number permitted by the Applicable
                Laws.

            


    

     

    
      	
              (b)

            	
              No
                single Participant may be granted options to purchase a number of
                Shares
                equalling more than 5% of the issued common shares of the Corporation
                in
                any twelve-month period unless the Corporation is classified as a
“Tier 1”
                issuer of the TSX Venture Exchange (“TSX-V”), has obtained disinterested
                shareholder approval in respect of such grant and meets the other
                requirements of the Applicable
                Laws.

            


    

     

    
      	
              (c)

            	
              Options
                shall not be granted if the exercise thereof would result in the
                issuance
                of more than 2% of the issued common shares of the Corporation in
                any
                twelve-month period to any one consultant of the Corporation (or
                any of
                its subsidiaries).

            


    

     

    
      	
              (d)

            	
              Options
                shall not be granted if the exercise thereof would result in the
                issuance
                of more than 2% of the issued common shares of the Corporation in
                any
                twelve month period to persons employed to provide investor relation
                activities.  Options granted to consultants performing investor
                relations activities will contain vesting provisions such that vesting
                occurs over at least 12 months with no more than 1/4 of the options
                vesting in any 3 month period.

            


    

     

    
      	
              (e)

            	
              The
                aggregate fair market value, determined at the time the options are
                granted, of the Shares with respect to which Incentive Stock Options
                are
                exercisable for the first time by the holders during any calendar
                year
                (granted under this Plan and all other Incentive Stock Option plans
                of
                

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      the
        Corporation, a Related Corporation or a
        predecessor corporation) shall not exceed U.S.$100,000, or such other limit
        as
        may be prescribed by the Code as it may be amended from time to time (the
        “Annual Limit”) and any portion of an option which exceeds the
        Annual Limit shall not be void but rather shall be a Non-Qualified Stock
        Option.

       

    

    9.           Duration
      of Option

     

    Each
      option and all rights thereunder shall be expressed to expire on the date set
      out in the option agreement and shall be subject to earlier termination as
      provided in Sections 11 and 13, provided that in no circumstances shall the
      duration of an option exceed the maximum term permitted by the Applicable
      Laws.  For greater certainty, if the Corporation is listed on the
      TSX-V, the maximum term may not exceed 10 years if the Corporation is classified
      as a “Tier 1” issuer by the TSX-V, and the maximum term may not exceed 5 years
      if the Corporation is classified as a “Tier 2” issuer by the
      TSX-V.  Further, if any Incentive Stock Options are granted to a
      greater-than-ten percent (>10%) shareholder of the Corporation (as determined
      with reference to Section 424(d) of the Code) the term of such Incentive
      Stock Options shall not exceed 5 years.

     

    10.           Option
      Period, Consideration and Payment

     

    
      	
              (a)

            	
              The
                option period shall be a period of time fixed by the Board not to
                exceed
                the maximum term permitted by the Applicable Laws, provided that
                the
                option period shall be reduced with respect to any option as provided
                in
                Sections 12 and 13 covering cessation as a director, officer, consultant,
                employee or Management Company Employee of the Corporation or its
                subsidiaries, or death of the
                Participant.

            


    

     

    
      	
              (b)

            	
              Subject
                to any vesting restrictions imposed by the Applicable Laws, the Board
                may,
                in its sole discretion, determine the time during which options shall
                vest
                and the method of vesting, or that no vesting restriction shall
                exist.

            


    

     

    
      	
              (c)

            	
              Subject
                to any vesting restrictions imposed by the Board, options may be
                exercised
                in whole or in part at any time and from time to time during the
                option
                period.  To the extent required by the Applicable Laws, no
                options may be exercised under this Plan until this Plan has been
                approved
                by a resolution duly passed by the shareholders of the
                Corporation.

            


    

     

    
      	
              (d)

            	
              Any
                options granted prior to the ratification of this Plan by the shareholders
                of the Corporation shall be granted subject to shareholder approval
                of
                this Plan within twelve (12) months before or after the effective
                date of
                this Plan.  If such shareholder approval is sought and not
                obtained, all options granted prior thereto and thereafter shall
                be
                considered Non-Qualified Stock Options and any options granted to
“covered
                employees” will not be eligible for the exclusion set forth in Section
                162(m) of the Code with respect to the deductibility by the Corporation
                of
                certain compensation.

            


    

     

    
      	
              (d)

            	
              Except
                as set forth in Sections 11 and 13, no option may be exercised unless
                the
                Participant is at the time of such exercise a director, officer,
                consultant, or employee of the Corporation or any of its subsidiaries,
                or
                a Management Company Employee of the Corporation or any of its
                subsidiaries.

            


    

     

    
      	
              (e)

            	
              The
                exercise of any option will be contingent upon receipt by the Corporation
                at its head office of a written notice of exercise, specifying the
                number
                of Shares with respect to which the option is being exercised, accompanied
                by cash payment, certified cheque or bank draft for the full purchase
                price of such Shares with respect to which the option is
                exercised.  No Participant or his


            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      legal
        representatives, legatees or distributees will
        be, or will be deemed to be, a holder of any common shares of the Corporation
        unless and until the certificates for Shares issuable pursuant to options
        under
        the Plan are issued to him or them under the terms of the Plan.

       

    

    11.           Ceasing
      To Be a Director, Officer, Consultant or Employee

     

    If
      a
      Participant shall cease to be a director, officer, consultant, employee of
      the
      Corporation, or its subsidiaries, or ceases to be a Management Company Employee,
      for any reason (other than death), such Participant may exercise his option
      to
      the extent that the Participant was entitled to exercise it at the date of
      such
      cessation, provided that such exercise must occur within 90 days after the
      Participant ceases to be a director, officer, consultant, employee or a
      Management Company Employee, unless such Participant was engaged in investor
      relations activities, in which case such exercise must occur within 30 days
      after the cessation of the Participant’s services to the
      Corporation.

     

    Nothing
      contained in the Plan, nor in any option granted pursuant to the Plan, shall
      as
      such confer upon any Participant any right with respect to continuance as a
      director, officer, consultant, employee or Management Company Employee of the
      Corporation or of any of its subsidiaries or affiliates.

     

    12.           Non-Qualified
      Stock Option Assumed

     

    Each
      option agreement entered into
      between the Corporation and a Participant shall state whether the options
      granted are intended to be Incentive Stock Options or Non-Qualified Stock
      Options, provided that, in the absence of evidence to the contrary, all options
      granted pursuant to this Plan shall be Non-Qualified Stock Options.

     

    13.           Death
      of Participant

     

    Notwithstanding
      section 11, in the event of the death of a Participant, the option previously
      granted to him shall be exercisable only within the one (1) year after such
      death and then only:

     

    
      	
               

            	
              (a)

            	
              by
                the person or persons to whom the Participant’s rights under the option
                shall pass by the Participant’s will or the laws of descent and
                distribution; and

            


    

     

    
      	
               

            	
              (b)

            	
              if
                and to the extent that such Participant was entitled to exercise
                the
                option at the date of his death.

            


    

     

    14.           Rights
      of Optionee

     

    No
      person
      entitled to exercise any option granted under the Plan shall have any of the
      rights or privileges of a shareholder of the Corporation in respect of any
      Shares issuable upon exercise of such option until certificates representing
      such Shares shall have been issued and delivered.

     

    15.           Proceeds
      from Sale of Shares

     

    The
      proceeds from the sale of Shares issued upon the exercise of options shall
      be
      added to the general funds of the Corporation and shall thereafter be used
      from
      time to time for such corporate purposes as the Board may
      determine.

     

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    16.          Adjustments

     

    If
      the
      outstanding common shares of the Corporation are increased, decreased, changed
      into or exchanged for a different number or kind of shares or securities of
      the
      Corporation or another corporation or entity through reorganization, merger,
      re-capitalization, re-classification, stock dividend, subdivision or
      consolidation, any adjustments relating to the Shares optioned or issued on
      exercise of options and the exercise price per Share as set forth in the
      respective stock option agreements shall be made in accordance to the terms
      of
      such agreements.

     

    Adjustments
      under this Section shall be made by the Board whose determination as to what
      adjustments shall be made, and the extent thereof, shall be final, binding
      and
      conclusive.  No fractional Share shall be required to be issued under
      the Plan on any such adjustment.

     

    17.          Transferability

     

    All
      benefits, rights and options accruing to any Participant in accordance with
      the
      terms and conditions of the Plan shall not be transferable or assignable unless
      specifically provided herein or the extent, if any, permitted by the Applicable
      Laws.  During the lifetime of a Participant any benefits, rights and
      options may only be exercised by the Participant.

     

    18.          Amendment
      and Termination of Plan

     

    Subject
      to applicable approval of the applicable Exchange and compliance with the
      Applicable Laws, the Board may, at any time, suspend or terminate the
      Plan.  Subject to the approval of the applicable Exchange and
      compliance with the Applicable Laws, the Board may also at any time amend or
      revise the terms of the Plan; provided that no such amendment or revision shall
      result in a material adverse change to the terms of any options theretofore
      granted under the Plan, unless shareholder approval, or disinterested
      shareholder approval, as the case may be, is obtained for such amendment or
      revision.

     

    19.          Necessary
      Approvals

     

    The
      ability of a Participant to exercise options and the obligation of the
      Corporation to issue and deliver Shares in accordance with the Plan is subject
      to any approvals which may be required from shareholders of the Corporation
      and
      any regulatory authority or stock exchange having jurisdiction over the
      securities of the Corporation.  If any Shares cannot be issued to any
      Participant for whatever reason, the obligation of the Corporation to issue
      such
      Shares shall terminate and any option exercise price paid to the Corporation
      will be returned to the Participant.

     

    20.          Effective
      Date of Plan

     

    The
      Plan
      has been adopted by the Board of the Corporation subject to the approval of
      the
      applicable Exchange and, if so approved, subject to the discretion of the Board,
      the Plan shall become effective upon such approvals being obtained.

     

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    21.          Interpretation

     

    The
      Plan
      will be governed by and construed in accordance with the laws of the Province
      of
      Alberta.

     

    


     

    MADE
      by
      the board of directors of the Corporation as evidenced by the signature of
      the
      following director duly authorized in that behalf effective the day of, 2007,
      and approved by the shareholders of the Corporation on the  day of ,
      2007.

     

    


     

    


     

    
      	 	
              PATCH
                INTERNATIONAL INC.

               

              Per:  
                ______________________________