Exhibit 10.19


 


IT&E INTERNATIONAL GROUP, INC.


 


2005 EQUITY INCENTIVE PLAN


 


1.      PURPOSES.  The primary purpose of this IT&E International Group, Inc. 2005
Equity Incentive Plan (the “Plan”)
is to provide a means by which the Company can retain and maximize the services
of its current Employees, Directors and Consultants, and secure, retain and
maximize the services of new Employees, Directors and Consultants, by providing
Stock Awards, including Incentive Stock Options, Nonstatutory Stock Options,
Restricted Stock Awards and stock bonuses, to such persons on the terms and
conditions set forth in the Plan. In addition, the Plan is intended to generate
proceeds from the sale of Common Stock pursuant to Stock Awards that shall be
used as general funds of the Company.


 


2.      DEFINED TERMS.  Capitalized terms in this Plan shall have the meanings set forth in Appendix A attached hereto, unless defined
elsewhere in this Plan or the context of their use clearly indicates a
different meaning.


 


3.      ADMINISTRATION.


 


3.1   Authority of Board.  Unless and until the Board decides to delegate administration of the
Plan to a Committee as set forth in Section 3.2 below, the Board shall
have full authority to administer the Plan, subject only to the express
provisions and limitations set forth in the Plan and any applicable laws.  Without limiting the generality of the
foregoing, the Board shall be fully empowered to: (i) determine, from time
to time, the recipients of Stock Awards and the terms upon which Stock Awards
shall be granted to such recipients; (ii) construe and interpret, and
correct any defects, omissions or inconsistencies in, the Plan and any Stock
Awards; (iii) terminate, suspend or amend the Plan or any Stock Award as
provided in Section 11; and (iv) exercise such powers and perform
such acts consistent with the provisions of the Plan as the Board deems
necessary or expedient to promote the best interests of the Company and its
stockholders. The determinations of the Board with respect to the Plan shall
not be subject to review by any Person and shall be final, binding and
conclusive on the Company and all other Persons.


 


3.2   Delegation to Committee.  In accordance with the Board’s authority under the Delaware General
Corporation Law and the Company’s Bylaws, the Board may delegate administration
of the Plan to a Committee, which Committee shall, upon such delegation, be
empowered to exercise the full authority of the Board with respect to the Plan.


 


4.      COMMON STOCK SUBJECT TO THE
PLAN.


 


4.1      Reserve Pool.  Subject to the provisions of Section 10 relating to
Capitalization Adjustments, an aggregate of 25,000,000 shares of Common Stock
(the “Reserve Pool”)
may be issued pursuant to Stock Awards. If any Stock Award shall for any reason
expire or otherwise terminate, in whole or in part, without having been
exercised in full, the shares of Common Stock not acquired under such Stock
Award shall automatically revert to the Reserve Pool and again become available
for issuance under the Plan. During the term of the Plan, the Company shall
keep available in the Reserve Pool at all times a number of shares of Common
Stock sufficient to satisfy all outstanding Stock Awards.


 


4.2      Limitation on Number of
Shares.  To the extent required by CCR Title 10,
the total number of shares of Common Stock issuable upon exercise of all
outstanding Stock Awards, together with the total number of shares of Common
Stock provided for under any stock bonus or similar plan of the Company, shall
not exceed the applicable percentage as calculated in accordance with the
conditions and exclusions of CCR Title 10, based on the shares of Common
Stock of the Company that are outstanding at the time the calculation is made.


 


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5.      ELIGIBILITY.


 


5.1   Employees.  Employees shall be eligible to receive each of the types of Stock
Awards provided for in the Plan.


 


5.2   Directors.  Directors shall be eligible to receive each of the types of Stock
Awards, except Incentive Stock Options, provided for in the Plan.


 


5.3   Consultants.  To the extent permitted by applicable law, consultants shall be
eligible to receive each of the types of Stock Awards, except Incentive Stock
Options, provided for in the Plan.


 


5.4   Ten Percent Stockholders.  In addition to any other applicable restrictions set forth in this Section 5,
a Ten Percent Stockholder shall not be granted: (i) an Incentive Stock
Option unless the exercise price of such Incentive Stock Option is at least one
hundred ten percent (110%) of the Fair Market Value of the Common Stock on the
date of grant and such Incentive Stock Option is not exercisable after the
expiration of five (5) years from the date of grant; (ii) a
Nonstatutory Stock Option unless the exercise price of such Nonstatutory Stock
Option is at least one hundred ten percent (110%) of the Fair Market Value of
the Common Stock on the date of grant, except as otherwise permitted by CCR
Title 10 at the time of the grant of the Nonstatutory Stock Option; (iii) a
Restricted Stock Award unless the purchase price of the Common Stock issuable
upon exercise of such Restricted Stock Award is at least one hundred percent
(100%) of the Fair Market Value of the Common Stock on the date of grant,
except as otherwise permitted by CCR Title 10 at the time of the grant of
the Restricted Stock Award.


 


5.5   Proprietary Information and
Inventions Agreement.


 


(a)     Prior
to being granted any Award under the Plan, each Employee shall have executed
and delivered to the Company a copy of the Company’s standard proprietary
information and inventions agreement or such other agreement containing similar
obligations of confidentiality as may be approved by the Board at the time the
Award is granted (any such agreement being referred to herein as a “Proprietary Information and
Inventions Agreement”). In the event that any Award is
inadvertently granted to an Employee who has not, as of the date of such grant,
entered into a Proprietary Information and Inventions Agreement with the
Company, such Award shall be deemed null and void ab initio.


 


(b)     In the
event that any Employee breaches any provision of the Proprietary Information
and Inventions Agreement between such Employee and the Company, such Employee
shall no longer be eligible to receive Awards pursuant to this Plan. Moreover,
such Employee shall be deemed, as of the date of such Employee’s breach of such
Proprietary Information and Inventions Agreement, to have forfeited all
outstanding Awards previously granted to and then held by such Employee,
regardless of whether such Awards are then vested or exercisable.


 


6.      PROVISIONS APPLICABLE TO ALL
STOCK AWARDS.


 


6.1   No Stockholder Rights.  No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to
any Stock Award held by such Participant unless and until such Participant has
satisfied all requirements for the exercise of the Stock Award pursuant to its
terms.


 


6.2   No Employment or Other
Service Rights.  Nothing in the Plan or any Stock Award
Agreement shall confer upon any Participant any right to continue to serve the
Company or an Affiliate in any capacity. Likewise, nothing in the Plan or any
Stock Award shall affect the right of the Company or any applicable Affiliate
to terminate: (i) the employment of an Employee with or without notice and
with or without Cause; (ii) the service of a Consultant pursuant to the
terms of such Consultant’s agreement with the Company or an Affiliate; or (iii) the
service of a Director pursuant to the bylaws of the Company or


 


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any
applicable Affiliate, and any applicable provisions of the corporate law of the
state in which the Company or the Affiliate is incorporated, as the case may
be.


 


6.3   Investment Assurances.  At any time that the issuance of the shares of Common Stock issuable
upon the exercise of a Stock Award has not been registered under an effective
registration statement under the Securities Act, the Company may: (i) require
a Participant, as a condition of acquiring Common Stock under such Stock Award,
to give written assurances satisfactory to the Company (a) as to the
Participant’s knowledge and experience in financial and business matters and
capability to evaluate the merits and risks of acquiring such Common Stock
under such Stock Award and (b) stating that the Participant is acquiring
such Common Stock under the Stock Award for the Participant’s own account and
not with any present intention of selling or otherwise distributing such Common
Stock; and (ii) place legends, including, without limitation, legends
restricting the transfer of such Common Stock, on any and all stock
certificates representing such Common Stock in order to comply with applicable
securities laws.


 


6.4   Withholding Obligations.  To the extent provided by the terms of a Stock Award Agreement, the
Participant may satisfy any federal, state or local tax withholding obligation
relating to the acquisition of Common Stock under a Stock Award by any of the
following means (in addition to the Company’s right to withhold from any
compensation paid to the Participant by the Company) or by a combination of
such means: (i) tendering a cash payment; or (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock
otherwise issuable to the Participant as a result of the acquisition of Common
Stock under the Stock Award; provided,
however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax required to
be withheld by law (or such lower amount as may be necessary to avoid variable
award accounting).


 


6.5   Vesting.  The Board or Committee may provide that the total number of shares of
Common Stock subject to a Stock Award shall vest in installments over any given
period of time. Criteria for determining the vesting of shares of Common Stock
subject to a Stock Award may be based solely on the passage of time or on any
other criteria, including, without limitation, the performance of the
Participant, deemed appropriate by the Board or Committee.


 


6.6   Acceleration of
Exercisability and Vesting.  The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which
a Stock Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Stock Award stating the time at which it
may first be exercised or the time during which it will vest.


 


6.7   Terms of Repurchase Options.  The terms of any repurchase option in favor of the Company with respect
to shares of Common Stock issuable pursuant to a Stock Award shall be specified
in the applicable Stock Award Agreement. The price per share of Common Stock at
which such repurchase option may be exercised may be either: (i) the Fair
Market Value of the shares of Common Stock on the date of the termination of
the applicable Participant’s Continuous Service; or (ii) the lower of (a) the
Fair Market Value of the shares of Common Stock on the date of repurchase and (b) the
original purchase price per share of Common Stock paid by the applicable
Participant; provided, however, that terms of any repurchase
option shall comply at all times with the provisions of CCR Title 10 relating
to “presumptively reasonable” repurchase prices.


 


6.8   Information Obligation.  To the extent required by CCR Title 10, the Company shall deliver
financial statements to Participants at least annually; provided, however,
that the obligation to deliver financial statements shall not apply to
Employees whose duties with the Company assure them access to equivalent
information.


 


7.      OPTIONS.


 


7.1   Stock Award Agreements for
Options.  Each Stock Award Agreement for an Option
shall be in such form and shall contain such terms and conditions as the Board
or Committee shall deem appropriate.


 


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The
terms and conditions of such Stock Award Agreements may change from time to
time, and the terms and conditions of Stock Award Agreements for separate
Options need not be identical; provided,
however, that each Stock Award
Agreement for an Option shall include (through incorporation of provisions
hereof by reference in the Stock Award Agreement or otherwise) the substance of
the provisions set forth in this Section 7.


 


7.2   Designation.  All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are
issued, a separate certificate or certificates shall be issued for shares of
Common Stock purchased on exercise of each type of Option.


 


7.3   Term.  Subject to the provisions of Section 5.4 above, no Option shall be
exercisable after the expiration of ten (10) years from the date it was
granted.


 


7.4   Minimum Vesting.  Notwithstanding Section 6.5 above, to the extent required by CCR
Title 10: (i) Options granted to an Employee who is not an Officer,
Director or Consultant shall provide for vesting of the total number of shares
of Common Stock at a rate of at least twenty percent (20%) per year over five (5) years
from the date the Option was granted, subject to reasonable conditions such as
Continuous Service; and (ii) Options granted to Officers, Directors or
Consultants may be made fully exercisable at any time or during any period
established by the Board or Committee, subject to reasonable conditions such as
Continuous Service.


 


7.5   Consideration.


 


(a)     The
purchase price of Common Stock acquired pursuant to an Option shall be paid, to
the extent permitted by applicable statutes and regulations, either: (i) in
cash at the time the Option is exercised; or (ii) pursuant to a program
developed under Regulation T as promulgated by the Federal Reserve Board that,
prior to the issuance of Common Stock, results in either the receipt by the
Company of cash (or a check) in the amount of, or the receipt by the Company of
a copy of irrevocable instructions previously delivered by the purchaser to the
purchaser’s broker instructing such broker to pay to the Company an amount
equal to, the aggregate exercise price for the number of shares of Common Stock
being issued to the purchaser in connection with the exercise of the Option
from the proceeds of the simultaneous sale of the Common Stock.


 


(b)     Notwithstanding
Section 7.5(a) above: (i) unless otherwise specifically provided
in the Option, the purchase price of Common Stock acquired pursuant to an
Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the
Common Stock of the Company that have been held for more than six (6) months
(or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes); and (ii) in the case of any
deferred payment arrangement, interest shall be compounded at least annually
and shall be charged at the minimum rate of interest necessary to avoid (a) the
treatment as interest, under any applicable provisions of the Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement and (b) the treatment of the Option as a variable award for
financial accounting purposes.


 


7.6   Early Exercise.  An Option may include a provision whereby the Participant may elect at
any time before the Participant’s Continuous Service terminates to exercise the
Option as to any part or all of the shares of Common Stock subject to the
Option prior to the full vesting of such shares of Common Stock. Subject to Section 6.7
above, any unvested shares of Common Stock so purchased may be subject to a
repurchase option in favor of the Company or to any other restriction the Board
determines to be appropriate.


 


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7.7   Termination of Continuous
Service.


 


(a)     Termination Other Than for Cause or As a Result of Death or
Disability. In the event
that a Participant’s Continuous Service terminates other than for Cause or as a
result of the Participant’s Disability or death, the Participant may exercise
his or her Option (to the extent that the Participant was entitled to exercise
such Option as of the date of termination) at any time within the period (the “Post-Termination Exercise Period”)
ending on the earlier of: (i) the expiration of the term of the Option as
set forth in the applicable Stock Award Agreement; or (ii) the date three (3) months
following the termination of the Participant’s Continuous Service (or such
longer or shorter period specified in the applicable Stock Award Agreement,
which period shall not be less than thirty (30) days). If, after the
termination of such Participant’s Continuous Service, such Participant does not
exercise his or her Option within such Post-Termination Exercise Period, the
Option shall terminate.


 


(b)     Termination for Cause. In the event a Participant’s Continuous Service is terminated for
Cause, the Option shall terminate upon the termination date of such Participant’s
Continuous Service, and the Participant shall be prohibited from exercising his
or her Option as of the time of such termination.


 


(c)     Termination As a Result of Disability. In the event that a Participant’s Continuous
Service terminates as a result of the Participant’s Disability, the Participant
may exercise his or her Option (to the extent that the Participant was entitled
to exercise such Option as of the date of termination), at any time during the
Post-Termination Exercise Period ending on the earlier of: (i) the
expiration of the term of the Option as set forth in the Stock Award Agreement;
or (ii) the date twelve (12) months following such termination of
Continuous Service (or such longer or shorter period specified in the Stock
Award Agreement, which period shall not be less than six (6) months). If,
after termination of Continuous Service, the Participant does not exercise his
or her Option within such Post-Termination Exercise Period, the Option shall
terminate.


 


(d)     Termination As a Result of Death. In the event that a Participant’s
Continuous Service terminates as a result of the Participant’s death or a
Participant dies within any applicable Post-Termination Exercise Period, then
such Participant’s Option may be exercised (to the extent the Participant was
entitled to exercise such Option as of the date of death) by the Participant’s
estate, by a Person who acquired the right to exercise the Option by bequest or
inheritance or by a Person designated to exercise the option upon the
Participant’s death pursuant to Section 7.8(b) or 7.9(b) below,
at any time during the Post-Termination Exercise Period ending on the earlier
of: (i) the expiration of the term of the Option as set forth in the Stock
Award Agreement; or (ii) the date eighteen (18) months following such
termination of Continuous Service (or such longer or shorter period specified
in the Stock Award Agreement, which period shall not be less than six (6) months).
If, after termination of Continuous Service, the Participant does not exercise
his or her Option within such Post-Termination Exercise Period, the Option
shall terminate.


 


7.8   Special Provisions for
Incentive Stock Options.


 


(a)     Exercise Price. Subject to the provisions of Section 5.4 above, the exercise price
of each Incentive Stock Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Incentive
Stock Option on the date the Incentive Stock Option is granted. Notwithstanding
the foregoing, an Incentive Stock Option may be granted with an exercise price
lower than that set forth in the preceding sentence if such Incentive Stock
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code.


 


(b)     Transferability. An Incentive Stock Option shall not be transferable except by will or
by the laws of descent and distribution and shall be exercisable during the
lifetime of the Participant only by


 


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the Participant. Notwithstanding the foregoing, a Participant may, by
delivering written notice to the Company in a form satisfactory to the Company,
designate a third party who, in the event of the death of such Participant,
shall thereafter be entitled to exercise such Participant’s Incentive Stock
Option.


 


(c)     $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the
time of grant) of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by any Participant during any calendar year
under all plans of the Company and its Affiliates exceeds $100,000, the
Incentive Stock Options or portions thereof that exceed such limit (according
to the order in which they were granted) shall be treated as Nonstatutory
Stock Options, notwithstanding any contrary provision of the applicable Stock
Award Agreement(s).


 


7.9   Special Provisions for
Nonstatutory Stock Options.


 


(a)     Exercise Price. Subject to the provisions of Section 5.4 above, the exercise price
of each Nonstatutory Stock Option shall be not less than eighty-five percent
(85%) of the Fair Market Value of the Common Stock subject to the Nonstatutory
Stock Option on the date the Nonstatutory Stock Option is granted.
Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with
an exercise price lower than that set forth in the preceding sentence if such
Nonstatutory Stock Option is granted pursuant to an assumption or substitution
for another option in a manner satisfying the provisions of Section 424(a) of
the Code.


 


(b)     Transferability. A Nonstatutory Stock Option shall not be transferable except by will or
by the laws of descent and distribution and, to the extent provided in the
Stock Award Agreement and as permitted by CCR Title 10 at the time of the
grant of the Nonstatutory Stock Option, and shall be exercisable during the
lifetime of the Participant only by the Participant. If a Nonstatutory Stock
Option does not provide for transferability, then such Nonstatutory Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Participant
only by the Participant. Notwithstanding the foregoing, a Participant may, by
delivering written notice to the Company in a form satisfactory to the Company,
designate a third party who, in the event of the death of such Participant,
shall thereafter be entitled to exercise such Participant’s Nonstatutory Stock
Option.


 


8.      STOCK BONUSES.


 


8.1   Stock Award Agreements for
Stock Bonuses.  Each Stock Award Agreement for a stock bonus
shall be in such form and shall contain such terms and conditions as the Board
or Committee shall deem appropriate. The terms and conditions of such Stock
Award Agreements may change from time to time, and the terms and conditions of
Stock Award Agreements for separate stock bonuses need not be identical; provided, however,
that each Stock Award Agreement for a stock bonus shall include (through
incorporation of provisions hereof by reference in the Stock Award Agreement or
otherwise) the substance of the provisions set forth in this Section 8.


 


8.2   Consideration.  A stock bonus may be awarded in consideration for past services
actually rendered to the Company or an Affiliate for its benefit.


 


8.3   Termination of Participant’s
Continuous Service.  In the event that a Participant’s Continuous
Service terminates, the Company may reacquire, for no consideration, any or all
of the shares of Common Stock held by the Participant that have not vested as
of the date of termination under the terms of the Stock Award Agreement for the
stock bonus.


 


8.4   Transferability.  Rights to acquire shares of Common Stock under the Stock Award
Agreement for a stock bonus shall not be transferable except by will or by the
laws of descent and distribution and shall be exercisable during the lifetime
of the Participant only by the Participant.


 


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9.      RESTRICTED STOCK AWARDS.


 


9.1   Stock Award Agreements for
Restricted Stock Awards.  Each Stock Award Agreement for a Restricted
Stock Award shall be in such form and shall contain such terms and conditions
as the Board or Committee shall deem appropriate. The terms and conditions of
such Stock Award Agreements may change from time to time, and the terms and
conditions of Stock Award Agreements for separate Restricted Stock Awards need
not be identical; provided, however, that each Stock Award Agreement
for a Restricted Stock Award shall include (through incorporation of provisions
hereof by reference in the Stock Award Agreement or otherwise) the substance of
the provisions set forth in this Section 9.


 


9.2   Purchase Price.  At the time of grant of a Restricted Stock Award, the Board or
Committee will determine the price to be paid by the Participant for each share
of Common Stock subject to such Restricted Stock Award. Subject to the
provisions of Section 5.4 above, the purchase price of Restricted
Stock Awards shall not be less than eighty-five percent (85%) of the Fair
Market Value of the Common Stock on the date such Restricted Stock Award is
made or at the time the purchase is consummated. A Restricted Stock Award may
be awarded as a stock bonus (i.e., with no cash purchase price to be
paid) to the extent permissible under applicable law.


 


9.3   Consideration.  At the time of the grant of a Restricted Stock Award, the Board will
determine the consideration permissible for the payment of the purchase price
of the Restricted Stock Award. The purchase price of Common Stock acquired
pursuant to the Stock Award Agreement for the Restricted Stock Award shall be
paid either: (i) in cash at the time of purchase; (ii) at the
discretion of the Board, according to a deferred payment or other similar
arrangement with the Participant; (iii) by services rendered or to be
rendered to the Company; or (iii) in any other form of legal consideration
that may be acceptable to the Board in its discretion.


 


9.4   Termination of Participant’s
Continuous Service.  Subject to Section 6.7, in the event
that a Participant’s Continuous Service terminates, the Company may repurchase
or otherwise reacquire any or all of the shares of Common Stock held by the
Participant that have not vested as of the date of termination under the terms
of the Stock Award Agreement for such Participant’s Restricted Stock Award.


 


9.5   Transferability.  Rights to acquire shares of Common Stock under the Stock Award
Agreement for a Restricted Stock Award shall not be transferable except by will
or by the laws of descent and distribution and shall be exercisable during the
lifetime of the Participant only by the Participant.


 


10.   ADJUSTMENTS UPON CHANGES IN
STOCK.


 


10.1    Capitalization Adjustments.  If any change is made in, or other event occurs with respect to, the
Common Stock of the Company without the receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction (each a “Capitalization Adjustment”)),
the Plan will be appropriately adjusted in the class and maximum number of
securities subject to the Plan pursuant to Section 4.1, and the
outstanding Stock Awards will be appropriately adjusted in the class and number
of securities and price per share of Common Stock subject to such outstanding
Stock Awards; provided, however, that the conversion of any convertible
securities of the Company shall not be treated as a transaction “without
receipt of consideration” by the Company and shall not give rise to a
Capitalization Adjustment pursuant to this Section 10.1. The Board or
Committee shall make such adjustments, which shall be final, binding and
conclusive.


 


10.2    Dissolution or Liquidation.  In the event of a dissolution or liquidation of the Company, then all
outstanding Stock Awards shall terminate immediately prior to the completion of
such dissolution or liquidation, and shares of Common Stock subject to any
repurchase option in favor of the Company may


 


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be
repurchased by the Company, notwithstanding the fact whether or not the
applicable Participant’s Continuous Service has terminated.


 


10.3    Corporate Transaction.


 


(a)     In the
event of a Corporate Transaction, any surviving corporation or acquiring
corporation may (but need not) assume or continue any or all Stock Awards
outstanding under the Plan or may (but need not) substitute similar stock
awards for Stock Awards outstanding under the Plan (including an award to
acquire the same consideration paid to the stockholders or the Company, as the
case may be, pursuant to the Corporate Transaction), and any reacquisition or
repurchase rights held by the Company in respect of Common Stock issued
pursuant to Stock Awards may be assigned by the Company to the successor of the
Company or to the acquiring corporation (or such successor’s or acquiring
corporation’s parent company), if any, in connection with such Corporate
Transaction. In the event any surviving corporation or acquiring corporation
elects to assume or continue any or all Stock Awards outstanding under the
Plan, such Stock Awards shall remain in effect in accordance with the terms of
this Plan and the applicable Stock Award Agreements, but shall thereafter
represent the right to receive (upon exercise thereof in accordance with the
terms of such Stock Awards, if applicable) for each share of Common Stock underlying
each such Stock Award such cash, securities or other property that would have
been received by the applicable Participant had such Participant exercised such
Stock Award immediately prior to the effective time of the Corporate
Transaction.


 


(b)     In the
event that, in connection with a Corporate Transaction, any surviving
corporation or acquiring corporation does not assume or continue any or all
such outstanding Stock Awards or substitute similar stock awards for such
outstanding Stock Awards, then with respect to Stock Awards that have not been
assumed, continued or substituted, such Stock Awards shall terminate if not
exercised (if applicable) at or prior to the effective time of such Corporate
Transaction, and any reacquisition or repurchase rights held by the Company
with respect to such Stock Awards held by Participants whose Continuous Service
has not terminated shall (contingent upon the effectiveness of the Corporate
Transaction) lapse.


 


10.4    Change in Control.  A Stock Award held by any Participant whose Continuous Service has not
terminated prior to the effective time of a Change in Control may be subject to
additional acceleration of vesting and exercisability upon or after such Change
in Control as may be provided in the Stock Award Agreement for such Stock
Award; provided, however, that in the absence of any such
provision in the Stock Award Agreement for such Stock Award, no such
acceleration shall occur.


 


11.   TERMINATION, SUSPENSION AND
AMENDMENT.


 


11.1    Termination or Suspension of
the Plan.  The Board may suspend or terminate the Plan
at any time. Unless sooner terminated, the Plan shall terminate on the day
before the tenth (10th) anniversary of the date the Plan is adopted
by the Board or approved by the stockholders of the Company, whichever is
earlier. No Stock Awards may be granted under the Plan while the Plan is
suspended or after it is terminated.


 


11.2    Amendment of the Plan and
Stock Awards.  Subject to Section 11.3 below, the Board
may, from time to time, amend the Plan or any Stock Award in any manner it
deems appropriate or necessary. Notwithstanding the foregoing, except as
expressly provided elsewhere in the Plan, no amendment to the Plan shall be
effective unless approved by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy the requirements of Section 422 of the
Code.


 


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11.3    No Impairment.  No termination or suspension of the Plan or amendment of the Plan or
any Stock Award shall impair rights of a Participant with respect to any
outstanding Stock Award unless the Company receives the written consent of
such Participant.


 


12.   MISCELLANEOUS.


 


12.1    Compliance with Laws.


 


(a)     This
Plan and the obligations of the Company with respect to any Stock Awards
granted hereunder shall be subject to all applicable federal and state
securities laws. If, after reasonable efforts, the Company is unable to obtain
from any applicable regulatory commission or agency the authority that legal
counsel for the Company deems necessary for the lawful issuance and sale of
Common Stock pursuant to such Stock Awards, then the Company shall be relieved
from any liability for failure to issue and sell Common Stock in connection
with such Stock Awards unless and until such authority is obtained.


 


(b)     To
facilitate the grant of any Stock Award, the Committee may impose special terms
for Stock Awards granted to Participants who are foreign nationals or who are
employed by the Company or any Affiliate outside of the United States as the
Board or Committee may consider necessary or appropriate to accommodate
differences in local laws, tax policies or customs.


 


12.2    Severability.  If one or more provisions of this Plan are held to be unenforceable
under applicable law, such provision shall be excluded from this Plan and the
balance of the Plan shall be interpreted as if such provision were so excluded
and shall be enforceable in accordance with its terms.


 


12.3    Governing Law.  The
law of the State of California shall govern all questions concerning the
construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules.


 


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APPENDIX A


 


DEFINITIONS


 


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


 


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


 


“Cause”
means, with respect to a particular Participant, the occurrence of any of the
following:  (i) such Participant’s
conviction of any felony or any crime involving fraud; (ii) such
Participant’s participation (whether by affirmative act or omission) in a fraud
or felonious act against the Company and/or its Affiliates; (iii) such
Participant’s violation of any statutory or fiduciary duty, or duty of loyalty
owed to the Company and/or its Affiliates and which has a material adverse
effect on the Company and/or its Affiliates; (iv) such Participant’s
violation of state or federal law in connection with such Participant’s
performance of such Participant’s job; (v) breach of any material term of
any contract between such Participant and the Company and/or its Affiliates;
and (vi) such Participant’s violation of any material Company policy; provided, however,
that the final determination that a termination is for Cause shall be made by
the Board or Committee, as applicable, in its sole and exclusive judgment and
discretion.


 


“CCR
Title 10” means Title 10 of the
California Code of Regulations, as amended from time to time.


 


“Change
in Control” means any Corporate Transaction or
the occurrence, in any single transaction or in any series of related
transactions not approved by the Board, of any Person becoming the Owner,
directly or indirectly, of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company’s
then-outstanding securities; provided,
however, that notwithstanding the
foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the
Company or any Affiliate and the Participant shall supersede the foregoing definition
with respect to Stock Awards subject to such agreement (it being understood,
however, that if no definition of Change in Control or any analogous term is
set forth in such an individual written agreement, the foregoing definition
shall apply).


 


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


 


“Committee”
means a committee of one (1) or more members of the Board appointed by the
Board in accordance with Section 3.2 of the Plan.


 


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


 


“Company”
means IT&E International Group, Inc., a Delaware corporation.


 


“Consultant”
means any person, including an advisor, engaged by the Company or an Affiliate
to render consulting or advisory services and who is compensated for such services;
provided, however, that the term “Consultant” shall
not include Directors who are not compensated by the Company for their services
as Directors, and the payment of a fee by the Company for services which the
Board determines in its sole discretion are services as a Director shall not
cause a Director to be considered a “Consultant” for purposes of the Plan.


 


“Continuous
Service” means that the Participant’s
service with the Company or an Affiliate, whether as an Employee, Director or
Consultant, is not interrupted or terminated. A change in the capacity in which
the Participant renders service to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service, provided that there is no interruption or termination of
the Participant’s service with the Company or an Affiliate, shall not terminate
a Participant’s Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant of an Affiliate, or to a Director shall
not constitute an interruption of Continuous Service. The Board, Committee or
any authorized Officer of the Company, in that party’s sole discretion, may


 


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determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave
or any other personal leave. Notwithstanding the foregoing, a leave of absence
shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company’s leave of absence policy
or in the written terms of the Participant’s leave of absence.


 


“Corporate
Transaction” means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:


 


(a)     there is consummated a
merger, consolidation or similar transaction involving (directly or indirectly)
the Company if, immediately after the consummation of such merger,
consolidation or similar transaction, the stockholders of the Company
immediately prior thereto do not Own, directly or indirectly, either: (i) outstanding
voting securities representing more than fifty percent (50%) of the combined
outstanding voting power of the surviving Entity in such merger, consolidation
or similar transaction; or (ii) more than fifty percent (50%) of the
combined outstanding voting power of the parent of the surviving Entity in such
merger, consolidation or similar transaction;


 


(b)     the stockholders of the
Company approve or the Board approves a plan of complete dissolution or
liquidation of the Company, or a complete dissolution or liquidation of the
Company shall otherwise occur; or


 


(c)     there is consummated a sale
of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, other than a sale of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to an Entity more than fifty percent
(50%) of the combined voting power of the voting securities of which Entity is
Owned by stockholders of the Company in substantially the same proportion as
their Ownership of the Company immediately prior to such sale.


 


The term “Corporate Transaction”
shall not include a sale of assets, merger or other transaction effected
exclusively for the purpose of changing the domicile of the Company.


 


“Director”
means a member of the Board.


 


“Disability”
means the inability of a person, in the opinion of a qualified physician
acceptable to the Company, to perform the duties of that person’s position with
the Company or an Affiliate because of the sickness or injury of the person.


 


“Employee”
means any person employed by the Company or an Affiliate; provided, however,
that service as a Director, or payment of a fee by the Company for services
which the Board determines in its sole discretion are services as a Director or
as a member of the Board of Directors of an Affiliate, shall not be sufficient
to constitute “employment” by the Company or such Affiliate.


 


“Entity”
means any corporation (including any non-profit corporation), general
partnership, limited partnership, limited liability partnership, joint venture,
estate, trust, company (including any limited liability company or joint stock
company), firm or other enterprise, association, organization or entity.


 


“Fair
Market Value” means, as of any date, the value
of the Common Stock determined by the Board in good faith and in a manner
consistent with CCR Title 10.


 


“Incentive
Stock Option” means an option to purchase shares
of Common Stock that is intended to qualify as an “incentive stock option”
within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.


 


“Nonstatutory
Stock Option” means an option to purchase shares
of Common Stock that is not intended to qualify as an Incentive Stock Option.


 


“Officer” means
any person designated by the Company as an officer.


 


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“Option”
means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.


 


A Person shall be deemed to “Own”, to have “Owned”, to be the “Owner” of, or to
have acquired “Ownership”
of securities if such Person, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares voting
power, which includes the power to vote or to direct the voting, with respect
to such securities.


 


“Participant”
means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.


 


“Person”
means any natural person or Entity.


 


“Plan”
means this IT&E International Group, Inc. 2005 Equity Incentive Plan.


 


“Restricted
Stock Award” means an award of shares of Common
Stock, which is granted pursuant to the terms and conditions of Section 9
of the Plan.


 


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


 


“Stock
Award” means any right granted under the Plan, including an
Option, a Restricted Stock Award or a stock bonus.


 


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


 


“Ten
Percent Stockholder” means a person who Owns (or is
deemed to Own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates.


 


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