artfest_s8-ex1001.htm


    EXHIBIT
10.1


    ARTFEST
INTERNATIONAL, INC.

    2008
COMPENSATION PLAN

    
       

    

    This
Artfest International, Inc. 2007
COMPENSATION PLAN (the "Plan") is designed to retain
non-executive employees, consultants, and advisors (“Participants) and reward
them for making major contributions to the success of the
Company.  These objectives are accomplished by making long-term
incentive awards under the Plan thereby providing Participants with a
proprietary interest in the growth and performance of the Company.

    
    

     

    
      	1.	Definitions.
	 	 	 
	 	(a)	
              "Board" - The Board of
      Directors of the Company.

            
	 	 	 
	 	(b)	
              "Code" - The Internal
      Revenue Code of 1986, as amended from time to time.

            
	 	 	 
	 	(c)	
              "Committee" - The
      Compensation Committee of the Company's Board, or such other committee of
      the Board that is designated by the Board to administer the Plan, composed
      of not less than two members of the Board all of whom are disinterested
      persons, as contemplated by Rule 16b-3 ("Rule 16b-3") promulgated
      under the Securities Exchange Act of 1934, as amended (the "Exchange
      Act").

            
	 	 	 
	 	(d)	
              "Company" – Artfest
      International, inc. and its subsidiaries.

            
	 	 	 
	 	(e)	
              "Exchange Act" - The Securities
      Exchange Act of 1934, as amended from time to time.

            
	 	 	 
	 	(f)	
              "Fair Market Value" - The
      fair market value of the Company's issued and outstanding Stock as
      determined in good faith by the Board or Committee.

            
	 	 	 
	 	(g)	
              "Grant" - The grant of
      any stock award to a Participant pursuant to such terms, conditions and
      limitations as the Committee may establish in order to fulfill the
      objectives of the Plan.

            
	 	 	 
	 	(h)	
              "Grant Agreement" - An
      agreement between the Company and a Participant that sets forth the terms,
      conditions and limitations applicable to a Grant.

            
	 	 	 
	 	(i)	
              “Option” – An Option to
      purchase the Company's Stock that may be awarded to a Participant under
      the Plan. A Participant who receives an award of an Option shall be
      referred to as an "Optionee."

            
	 	 	 
	 	(j)	
              "Participant" - An
      outside consultant, professional and service provider of the Company to
      whom an Award has been made under the Plan.

            
	 	 	 
	 	(k)	
              "Securities Act" - The
      Securities Act of 1933, as amended from time to
  time.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	(l)	
              "Stock" - Authorized and
      issued or unissued shares of common stock of the
  Company.

            
	 	 	 
	 	(m)	
              "Stock Award" - A Grant
      made under the Plan in Stock, Options to purchase Stock, or denominated in
      units of stock for which the Participant is not obligated to pay
      additional consideration.

            
	 	 	 
	2.	
              Administration.

            
	 	 	 
	 	
              The Plan shall be
      administered by the Board, provided however, that the Board may delegate
      such administration to the Committee. Subject to the provisions of the
      Plan, the Board and/or the Committee shall have authority to (a) grant, in
      its discretion, Stock Awards; (b) determine in good faith the fair market
      value of the Stock covered by any Grant; (c) determine which eligible
      persons shall receive Grants and the number of shares, restrictions, terms
      and conditions to be included in such Grants; (d) construe and interpret
      the Plan; (e) promulgate, amend and rescind rules and regulations relating
      to its administration, and correct defects, omissions and inconsistencies
      in the Plan or any Grant; (f) consistent with the Plan and with the
      consent of the Participant, as appropriate, amend any outstanding Grant;
      (g) determine the duration and purpose of leaves of absence which may be
      granted to Participants without constituting termination of their
      engagement for the purpose of the Plan or any Grant; and (h) make all
      other determinations necessary or advisable for the Plan's administration.
      The interpretation and construction by the Board of any provisions of the
      Plan or selection of Participants shall be conclusive and final. No member
      of the Board or the Committee shall be liable for any action or
      determination made in good faith with respect to the Plan or any Grant
      made thereunder.

            
	 	 	 
	3.	
              Eligibility.

            
	 	 	 
	 	
              The persons who
      shall be eligible to receive Grants shall be retain non-executive
      employees, consultants, and advisors to the Company. The term consultant
      shall mean any person, other than an employee, who is engaged by the
      Company to render services and is compensated for such
      services.

            
	 	 	 
	4.	
              Stock.

            
	 	 	 
	 	(a)	
              Authorized
      Stock: Stock subject to Grants may be either unissued or reacquired
      Stock.

            
	 	 	 
	 	(b)	
              Number of
      Shares:  The total number of shares of Stock which may be
      purchased or granted directly by Options or Stock Awards or purchased
      indirectly through exercise of Options granted under the Plan shall not
      exceed Seventy Five Million (75,000,000) shares.  If any Grant
      shall for any reason terminate or expire, any shares allocated thereto but
      remaining unpurchased upon such expiration or termination shall again be
      available for Grants with respect thereto under the Plan as though no
      Grant had previously occurred with respect to such shares. Any shares of
      Stock issued pursuant to a Grant and repurchased pursuant to the terms
      thereof shall be available for future Grants as though not previously
      covered by a Grant.

            


    

     

    
      
        
        

      

      
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      	 	(c)	
              Reservation of
      Shares:  The Company shall reserve and keep available at
      all times during the term of the Plan such number of shares as shall be
      sufficient to satisfy the requirements of the Plan. If, after reasonable
      efforts, which efforts shall not include the registration of the Plan or
      Grants under the Securities Act, the Company is unable to obtain authority
      from any applicable regulatory body, which authorization is deemed
      necessary by legal counsel for the Company for the lawful issuance of
      shares hereunder, the Company shall be relieved of any liability with
      respect to its failure to issue and sell the shares for which such
      requisite authority was so deemed necessary unless and until such
      authority is obtained.

            
	 	 	 
	5.	
              Stock
      Awards.

            
	 	 	 
	 	
              All or part of any
      Stock Award under the Plan may be subject to conditions established by the
      Board or the Committee, and set forth in a Stock Award Agreement, which
      may include, but are not limited to, continuous service with the Company,
      achievement of specific business objectives, increases in specified
      indices, attaining growth rates and other comparable measurements of
      Company performance. Such Awards may be based on Fair Market Value or
      other specified valuation. All Stock Awards will be made pursuant to the
      execution of a Stock Award Agreement.

            
	 	 	 
	 	(a)	
              Conditions and
      Restrictions.  Shares of Stock which Participants may
      receive as a Stock Award under a Stock Award Agreement may include such
      restrictions as the Board or Committee, as applicable, shall determine,
      including restrictions on transfer, repurchase rights, right of first
      refusal, and forfeiture provisions. When transfer of Stock is so
      restricted or subject to forfeiture provisions it is referred to as "Restricted
      Stock."  Further, with Board or Committee approval, Stock
      Awards may be deferred, either in the form of installments or a future
      lump sum distribution. The Board or Committee may permit selected
      Participants to elect to defer distributions of Stock Awards in accordance
      with procedures established by the Board or Committee to assure that such
      deferrals comply with applicable requirements of the Code including, at
      the choice of Participants, the capability to make further deferrals for
      distribution after retirement. Any deferred distribution, whether elected
      by the Participant or specified by the Stock Award Agreement or by the
      Board or Committee, may require the payment be forfeited in accordance
      with the provisions of Section 5(b). .Dividends or dividend equivalent
      rights may be extended to and made part of any Stock Award, subject to
      such terms, conditions and restrictions as the Board or Committee may
      establish.

            
	 	 	 
	 	(b)	
              Cancellation and
      Rescission of Grants.  Unless the Stock Award Agreement
      specifies otherwise, the Board or Committee, as applicable, may cancel any
      unvested or deferred Grants at any time if the Participant is not in
      compliance with all other applicable provisions of the Stock Award
      Agreement, the Plan and with the following
  conditions:

            


    

     

    
      
        
        

      

      
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      	 	 	(i)	
              A
      Participant shall not render services for any organization or engage
      directly or indirectly in any business which, in the judgment of the chief
      executive officer of the Company or other senior officer designated by the
      Board or Committee, is or becomes competitive with the Company, or which
      organization or business, or the rendering of services to such
      organization or business, is or becomes otherwise prejudicial to or in
      conflict with the interests of the Company. For Participants whose
      engagement has terminated, the judgment of the chief executive officer
      shall be based on the Participant's position and responsibilities while
      employed by the Company, the Participant's post-engagement
      responsibilities and position with the other organization or business, the
      extent of past, current and potential competition or conflict between the
      Company and the other organization or business, the effect on the
      Company's customers, suppliers and competitors and such other
      considerations as are deemed relevant given the applicable facts and
      circumstances. A Participant who has retired shall be free, however, to
      purchase as an investment or otherwise, stock or other securities of such
      organization or business so long as they are listed upon a recognized
      securities exchange or traded over-the-counter, and such investment does
      not represent a substantial investment to the Participant or a greater
      than five percent (5%) equity interest in the organization or
      business.

            
	 	 	 	 
	 	 	(ii)	
              A
      Participant shall not, without prior written authorization from the
      Company, disclose to anyone outside the Company, or use in other than the
      Company's business, any confidential information or material relating to
      the business of the Company, acquired by the Participant either during or
      after engagement with the Company.

            
	 	 	 	 
	 	 	(iii)	
              A
      Participant shall disclose promptly and assign to the Company all right,
      title and interest in any invention or idea, patentable or not, made or
      conceived by the Participant during engagement by the Company, relating in
      any manner to the actual or anticipated business, research or development
      work of the Company and shall do anything reasonably necessary to enable
      the Company to secure a patent where appropriate in the United States and
      in foreign countries.

            
	 	 	 	 
	 	 	
              (iv)

            	
              Upon
      exercise, payment or delivery pursuant to a Grant, the Participant shall
      certify on a form acceptable to the Committee that he or she is in
      compliance with the terms and conditions of the Plan.

            
	 	 	 	 
	 	(c)	
              Nonassignability. 

            
	 	 	 	 
	 	 	(i)	
              Except
      as set forth in Section 5(c)(ii), no Grant or any other benefit under the
      Plan shall be assignable or transferable, or payable to, anyone other than
      the Participant to whom it was granted.

            
	 	 	 	 
	 	 	(ii)	
              Where
      a Participant terminates engagement and retains a Grant pursuant to
      Section 5(d)(ii) in order to assume a position with a governmental,
      charitable or educational institution, the Board or Committee, in its
      discretion and to the extent permitted by law, may authorize a third party
      (including but not limited to the trustee of a "blind" trust), acceptable
      to the applicable governmental or institutional authorities, the
      Participant and the Board or Committee, to act on behalf of the
      Participant with regard to such
Awards.

            


    

     

    
      
        
        

      

      
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      	 	(d)	
              Termination of
      Engagement.

            
	 	 	 	 	 
	 	 	
              If the engagement or
      service to the Company of a Participant terminates, other than pursuant to
      any of the following provisions under this Section 5(d), all unvested or
      deferred Stock Awards shall be cancelled immediately, unless the Stock
      Award Agreement provides otherwise:

            
	 	 	 	 	 
	 	 	(i)	Retirement Under a
      Company Retirement Plan.
	 	 	 	 	 
	 	 	 	
              When a Participant's
      engagement terminates as a result of retirement in accordance with the
      terms of a Company retirement plan, the Board or Committee may permit
      Stock Awards to continue in effect beyond the date of retirement in
      accordance with the applicable Grant Agreement and vesting of any such
      Grants may be accelerated.

            
	 	 	 	 	 
	 	 	(ii)	Rights in the Best
      Interests of the Company.
	 	 	 	 	 
	 	 	 	
              When a Participant
      resigns from the Company and, in the judgment of the Board or Committee,
      the acceleration and/or continuation of outstanding Stock Awards would be
      in the best interests of the Company, the Board or Committee may (i)
      authorize, where appropriate, the acceleration and/or continuation of all
      or any part of Grants issued prior to such termination and (ii) permit the
      vesting of such Grants for such period as may be set forth in the
      applicable Grant Agreement, subject to earlier cancellation at such time
      as the Board or Committee shall deem the continuation of all or any part
      of the Participant's Grants are not in the Company's best
      interest.

            
	 	 	 	 	 
	 	 	(iii)	Death or Disability of
      a Participant.
	 	 	 	 	 
	 	 	 	(1)	
              In
      the event of a Participant's death, the Participant's estate or
      beneficiaries shall have a period up to the expiration date specified in
      the Grant Agreement within which to receive or exercise any outstanding
      Grant held by the Participant under such terms as may be specified in the
      applicable Grant Agreement. Rights to any such outstanding Grants shall
      pass by will or the laws of descent and distribution in the following
      order: (a) to beneficiaries so designated by the Participant; if none,
      then (b) to a legal representative of the Participant; if none, then (c)
      to the persons entitled thereto as determined by a court of competent
      jurisdiction. Grants so passing shall be made at such times and in such
      manner as if the Participant were living.

            
	 	 	 	 	 
	 	 	 	(2)	
              In
      the event a Participant is deemed by the Board or Committee to be unable
      to perform his or her usual duties by reason of mental disorder or medical
      condition which does not result from facts which would be grounds for
      termination for cause, Grants and rights to any such Grants may be paid to
      the Participant, if legally competent, or a committee or other legally
      designated guardian or representative if the Participant is legally
      incompetent by virtue of such
disability.

            


    

     

    
      
        
        

      

      
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              (3)

            	
              After
      the death or disability of a Participant, the Board or Committee may in
      its sole discretion at any time (1) terminate restrictions in Grant
      Agreements; (2) accelerate any or all installments and rights; and (3)
      instruct the Company to pay the total of any accelerated payments in a
      lump sum to the Participant, the Participant's estate, beneficiaries or
      representative; notwithstanding that, in the absence of such termination
      of restrictions or acceleration of payments, any or all of the payments
      due under the Grant might ultimately have become payable to other
      beneficiaries.

            
	 	 	 	 	 
	 	 	 	
              (4)

            	
              In
      the event of uncertainty as to interpretation of or controversies
      concerning this Section 5, the determinations of the Board or Committee,
      as applicable, shall be binding and conclusive.

            
	 	 	 	 	 
	6.	
              Investment
      Intent.

            
	 	 	 	 	 
	 	
              All
      Grants under the Plan are intended to be exempt from registration under
      the Securities Act provided by Rule 701 thereunder. Unless and until the
      sale and issuance of Stock subject to the Plan are registered under the
      Securities Act or shall be exempt pursuant to the rules promulgated
      thereunder, each Grant under the Plan shall provide that the purchases or
      other acquisitions of Stock thereunder shall be for investment purposes
      and not with a view to, or for resale in connection with, any distribution
      thereof. Further, unless the issuance and sale of the Stock have been
      registered under the Securities Act, each Grant shall provide that no
      shares shall be purchased upon the exercise of the rights under such Grant
      unless and until (i) all then applicable requirements of state and federal
      laws and regulatory agencies shall have been fully complied with to the
      satisfaction of the Company and its counsel, and (ii) if requested to do
      so by the Company, the person exercising the rights under the Grant shall
      (i) give written assurances as to knowledge and experience of such person
      (or a representative employed by such person) in financial and business
      matters and the ability of such person (or representative) to evaluate the
      merits and risks of receiving the Stock as compensation, and (ii) execute
      and deliver to the Company a letter of investment intent and/or such other
      form related to applicable exemptions from registration, all in such form
      and substance as the Company may require. If shares are issued upon
      exercise of any rights under a Grant without registration under the
      Securities Act, subsequent registration of such shares shall relieve the
      purchaser thereof of any investment restrictions or representations made
      upon the exercise of such rights.

            
	 	 	 	 	 
	7.	
              Amendment,
      Modification, Suspension or Discontinuance of the Plan.

            
	 	 	 	 	 
	 	
              The Board may,
      insofar as permitted by law, from time to time, with respect to any shares
      at the time not subject to outstanding Grants, suspend or terminate the
      Plan or revise or amend it in any respect whatsoever, except that without
      the approval of the shareholders of the Company, no such revision or
      amendment shall (i) increase the number of shares subject to the Plan,
      (ii) decrease the price at which Grants may be granted, (iii) materially
      increase the benefits to Participants, or (iv) change the class of persons
      eligible to receive Grants under the Plan; provided, however, no such
      action shall alter or impair the rights and obligations under any Stock
      Award outstanding as of the date thereof without the written consent of
      the Participant thereunder. No Grant may be issued while the Plan is
      suspended or after it is terminated, but the rights and obligations under
      any Grant issued while the Plan is in effect shall not be impaired by
      suspension or termination of the
Plan.

            


    

     

    
      
        
        

      

      
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              In the event of any
      change in the outstanding Stock by reason of a stock split, stock
      dividend, combination or reclassification of shares, recapitalization,
      merger, or similar event, the Board or the Committee may adjust
      proportionally (a) the number of shares of Stock (i) reserved under the
      Plan, (ii) covered by outstanding Stock Awards; (b) the Stock prices
      related to outstanding Grants; and (c) the appropriate Fair Market Value
      and other price determinations for such Grants. In the event of any other
      change affecting the Stock or any distribution (other than normal cash
      dividends) to holders of Stock, such adjustments as may be deemed
      equitable by the Board or the Committee, including adjustments to avoid
      fractional shares, shall be made to give proper effect to such event. In
      the event of a corporate merger, consolidation, acquisition of property or
      stock, separation, reorganization or liquidation, the Board or the
      Committee shall be authorized to issue or assume stock options, whether or
      not in a transaction to which Section 424(a) of the Code applies, and
      other Grants by means of substitution of new Grant Agreements for
      previously issued Grants or an assumption of previously issued
      Grants.

            
	 	 	 	 	 
	8.	

              Tax
      Withholding.

            
	 	 	 	 	 
	 	
              The Company shall
      have the right to deduct applicable taxes from any Grant payment and
      withhold, at the time of delivery or exercise of Stock Awards or vesting
      of shares under such Grants, an appropriate number of shares for payment
      of taxes required by law or to take such other action as may be necessary
      in the opinion of the Company to satisfy all obligations for withholding
      of such taxes. If Stock is used to satisfy tax withholding, such stock
      shall be valued based on the Fair Market Value when the tax withholding is
      required to be made.

            
	 	 	 	 	 
	9.	

              Availability
      of Information.

            
	 	 	 	 	 
	 	
              During the term of
      the Plan and any additional period during which a Grant granted pursuant
      to the Plan shall be payable, the Company shall make available, not later
      than one hundred and twenty (120) days following the close of each of its
      fiscal years, such financial and other information regarding the Company
      as is required by the bylaws of the Company and applicable law to be
      furnished in an annual report to the shareholders of the
      Company.

            
	 	 
	10.	

              Notice.

            
	 	 
	 	
              Any written notice
      to the Company required by any of the provisions of the Plan shall be
      addressed to the chief personnel officer or to the chief executive officer
      of the Company, and shall become effective when it is received by the
      office of the chief personnel officer or the chief executive
      officer.

            
	 	 
	11.	

              Indemnification
      of Board.

            
	 	 
	 	
              In addition to such
      other rights or indemnifications as they may have as directors or
      otherwise, and to the extent allowed by applicable law, the members of the
      Board and the Committee shall be indemnified by the Company against the
      reasonable expenses, including attorneys' fees, actually and necessarily
      incurred in connection with the defense of any claim, action, suit or
      proceeding, or in connection with any appeal thereof, to which they or any
      of them may be a party by reason of any action taken, or failure to act,
      under or in connection with the Plan or any Grant granted thereunder, and
      against all amounts paid by them in settlement thereof (provided such
      settlement is approved by independent legal counsel selected by the
      Company) or paid by them in satisfaction of a judgment in any such claim,
      action, suit or proceeding, except in any case in relation to matters as
      to which it shall be adjudged in such claim, action, suit or proceeding
      that such Board or Committee member is liable for negligence or misconduct
      in the performance of his or her duties; provided that within sixty (60)
      days after institution of any such action, suit or Board proceeding the
      member involved shall offer the Company, in writing, the opportunity, at
      its own expense, to handle and defend the same.

            
	 	 
	12.	

              Governing
      Law.

            
	 	 
	 	The Plan and all
      determinations made and actions taken pursuant hereto, to the extent not
      otherwise governed by the Code or the securities laws of the United
      States, shall be governed by the law of the State of Delaware and
      construed accordingly.


    

     

     

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    The
foregoing 2008 COMPENSATION PLAN (consisting of 9 pages, including this page)
was duly adopted and approved by the Board of Directors on October 27,
2008.

    


    
      	 
      	
              Artfest
      International, Inc.

              a
      Delaware corporation

               

              /s/ Eddie Vakser

              By:
      Eddie Vakser

              Title:
      President

            


    

     

     

     

     

     

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