ex4-1.htm


    

      URBAN
BARNS FOODS INC.

       

      2010
STOCK PLAN

       

      1. Purpose.

       

      The purpose of this plan (the
"Plan") is to secure for Urban Barns Foods Inc. (the "Corporation") and its
stockholders the benefits arising from capital stock ownership by employees,
officers and directors of, and consultants or advisors to, the Corporation and
its subsidiary corporations who are expected to contribute to the Corporation's
future growth and success.  The Plan permits grants of options to
purchase shares of Common Stock, $0.001 par value per share, of the Corporation
(“Common Stock”) and awards of shares of Common Stock that are restricted as
provided in Section 12 (“Restricted Shares”).  Those provisions of the
Plan which make express reference to Section 422 of the Internal Revenue Code of
1986, as amended or replaced from time to time (the "Code"), shall apply only to
Incentive Stock Options (as that term is defined in the
Plan).

       

      2.
Type
of Options and Administration.

       

               
(a)           Types
of Options.  Options granted pursuant to the Plan shall be
authorized by action of the Board of Directors of the Corporation (or a
Committee designated by the Board of Directors) and may be either incentive
stock options ("Incentive Stock Options") meeting the requirements of Section
422 of the Code or non-statutory options which are not intended to meet the
requirements of Section 422 of the Code.

       

                (b)           Administration.  The
Plan will be administered by the Board of Directors of the Corporation, whose
construction and interpretation of the terms and provisions of the Plan shall be
final and conclusive.  The Board of Directors may in its sole
discretion grant Restricted Shares and options to purchase shares of Common
Stock and issue shares upon exercise of such options as provided in the
Plan.  The Board shall have authority, subject to the express
provisions of the Plan, to construe the respective option and Restricted Share
agreements and the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
option and Restricted Share agreements, which need not be identical, and to make
all other determinations in the judgment of the Board of Directors necessary or
desirable for the administration of the Plan.  The Board of Directors
may correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any option or Restricted Share agreement in the manner and to the
extent it shall deem expedient to carry the Plan into effect and it shall be the
sole and final judge of such expediency.  No director or person acting
pursuant to authority delegated by the Board of Directors shall be liable for
any action or determination under the Plan made in good faith.  The
Board of Directors may, to the full extent permitted by or consistent with
applicable laws or regulations (including, without limitation, applicable state
law and Rule 16b-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), or any successor rule ("Rule 16b-3")), delegate any or all of
its powers under the Plan to a committee (the "Committee") appointed by the
Board of Directors, and if the Committee is so appointed all references to the
Board of Directors in the Plan shall mean and relate to such Committee with
respect to the powers so delegated.  Any director to whom an option or
stock grant is awarded shall be ineligible to vote upon his or her option or
stock grant, but such option or stock grant may be awarded any such director by
a vote of the remainder of the directors, except as limited
below.

       

               
(c)           Applicability
of Rule 16b-3.  Those provisions of the Plan which make express
reference to Rule 16b-3 shall apply to the Corporation only at such time as the
Corporation's Common Stock is registered under the Exchange Act, and then only
to such persons as are required to file reports under Section 16(a) of the
Exchange Act (a "Reporting Person").

       

               
(d)           Compliance
with Section 162(m) of the Code.  Section 162(m) of the Code,
added by the Omnibus Budget Reconciliation Act of 1993, generally limits the tax
deductibility to publicly held companies of compensation in excess of $1,000,000
paid to certain “covered employees” (“Covered Employees”).  It is the
Corporation’s intention to preserve the deductibility of such compensation to
the extent it is reasonably practicable and to the extent it is consistent with
the Corporation’s compensation objectives.  For purposes of this Plan,
Covered Employees of the Corporation shall be those employees of the Corporation
described in Section 162(m)(3) of the Code.

       

               
(e)           Special
Provisions Applicable to Options Granted to Covered
Employees.  In order for the full value of options granted to
Covered Employees to be deductible by the Corporation for federal income tax
purposes, the Corporation may intend for such options to be treated as
“qualified performance based compensation” as described in Treas. Reg.
§1.162-27(e) (or any successor regulation).  In such case, options
granted to Covered Employees shall be subject to the following additional
requirements:

       

      (i)           such
options and rights shall be granted only by a committee comprised solely of two
or more “outside directors”, within the meaning of Treas. Reg. § 1.162.27


                                          
(e)(3); and

       

      (ii)           the
exercise price of such options shall in no event be less than the Fair Market
Value (as defined below) of the Common Stock as of the date of grant of such


                                           
options.

       

                (f)           Section
409A of the Code.  The Board of Directors may only grant those
awards that either comply with the applicable requirements of Section 409A of
the Code, or do not result in the deferral of compensation within the meaning of
Section 409A of the Code.

       

      3.
Eligibility.

       

               (a)      General.  Options
and Restricted Shares may be granted to persons who are, at the time of grant,
in a Business Relationship (as defined below) with the Corporation; provided,
that Incentive Stock Options may only be granted to individuals who are
employees of the Corporation (within the meaning of Section 3401(c) of the
Code).  A person who has been granted an option or Restricted Shares
may, if he or she is otherwise eligible, be granted additional options or
Restricted Shares if the Board of Directors shall so determine.  For
purposes of the Plan, “Business Relationship” means that a person is serving the
Corporation, its parent, if applicable, or any of its subsidiaries, if
applicable, in the capacity of an employee, officer, director, advisor or
consultant.

       

              
(b)           Grant
of Options to Reporting Persons.  From and after the
registration of the Common Stock of the Corporation under the Exchange Act, the
selection of a director or an officer who is a Reporting Person (as the terms
"director" and "officer" are defined for purposes of Rule 16b-3) as a recipient
of an option or Restricted Shares, the timing of the option or Restricted Share
grant, the exercise price of the option and the number of Restricted Shares or
shares subject to the option shall be determined either (i) by the Board of
Directors, or (ii) by a committee consisting of two or more "Non-Employee
Directors" having full authority to act in the matter.  For the
purposes of the Plan, a director shall be deemed to be a "Non-Employee Director"
only if such person qualifies as a "Non-Employee Director" within the meaning of
Rule 16b-3, as such term is interpreted from time to time.

       

      
        
          
          

        

        
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      4.
Stock
Subject to Plan.

       

      The stock subject
to options granted under the Plan or grants of Restricted Shares shall be shares
of authorized but unissued or reacquired Common Stock.  Subject to
adjustment as provided in Section 16 below, the maximum number of shares of
Common Stock of the Corporation (“Shares”) which may be issued and sold under
the Plan is 4,000,000
Shares.  If any Restricted Shares shall be reacquired by the
Corporation, forfeited or an option granted under the Plan shall expire,
terminate or is canceled for any reason without having been exercised in full,
the forfeited Restricted Shares or unpurchased Shares subject to such option
shall again be available for subsequent option or Restricted Share grants under
the Plan. Subject to adjustment in accordance with Section 16:

       

      (a)           No
more than an aggregate of
2,000,000 Shares may be issued under Stock Options during the term of the
Plan;

       

      (b)           No
more than an aggregate of
2,000,000 Shares may be issued in the form of Restricted Shares during
the term of the Plan; and

       

      (c)           The
maximum number of Shares with respect to which options may be granted to any one
person during any fiscal year of the Corporation may not exceed 5% of the
Corporation’s issued and outstanding shares at the time of grant.

       

      These limits shall be applied and
construed consistently with Section 162(m) of the Code.

       

      5.
Forms
of Option and Restricted Share Agreements.

       

      As a condition to the grant of
Restricted Shares or an option under the Plan, each recipient of Restricted
Shares or an option shall execute an option or Restricted Share or Stock
Option  agreement in such form not inconsistent with the Plan as may
be approved by the Board of Directors.  Such Option or Restricted
Share agreements may differ among recipients.

       

      6.
Purchase
Price.

       

      (a)           General.  The
purchase price per Share deliverable upon the exercise of an option shall be
determined by the Board of Directors at the time of grant of such option; provided,
however,
that the exercise price of an option shall not be less than 100% of the Fair
Market Value (as hereinafter defined) of a Share, at the time of grant of such
option, or not less than 110% of such Fair Market Value in the case of an
Incentive Stock Option described in Section 11(b).  "Fair Market
Value" of a Share as of a specified date for the purposes of the Plan shall mean
the closing price of a Share on the principal securities exchange on which such
Shares are traded on the day immediately preceding the date as of which Fair
Market Value is being determined, or on the next preceding date on which such
Shares are traded if no shares were traded on such immediately preceding day, or
if the Shares are not traded on a securities exchange, Fair Market Value shall
be deemed to be the average of the high bid and low asked prices of the Shares
in the over-the-counter market on the day immediately preceding the date as of
which Fair Market Value is being determined or on the next preceding date on
which such high bid and low asked prices were recorded.  In no case
shall Fair Market Value be determined with regard to restrictions other than
restrictions which, by their terms, will never lapse.  The Board of
Directors may also permit optionees, either on a selective or aggregate basis,
to simultaneously exercise options and sell the Shares thereby acquired,
pursuant to a brokerage or similar arrangement, approved in advance by the Board
of Directors, and to use the proceeds from such sale as payment of the purchase
price of such shares.

       

      (b)           Payment
of Purchase Price.  Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Corporation in an amount equal to the exercise price of such
options, or, to the extent provided in the applicable option agreement, (i) by
delivery to the Corporation of Shares having a Fair Market Value on the date of
exercise equal in amount to the exercise price of the options being exercised,
(ii) through any cashless exercise feature that may be included in the option
agreement covering a particular option grant, (iii) by any other
means  which the Board of Directors determines are consistent with the
purpose of the Plan and with applicable laws and regulations (including, without
limitation, the provisions of Rule 16b-3 and Regulation T promulgated by the
Federal Reserve Board) or (iv) by any combination of such methods of
payment.

       

      7.
Option
Period.

       

      Subject to earlier termination as
provided in the Plan, each option and all rights thereunder shall expire on such
date as determined by the Board of Directors and set forth in the applicable
option agreement, provided,
that such date shall not be later than (10) ten years after the date on which
the option is granted.

       

      8.
Exercise
of Options.

       

      Each option granted under the Plan
shall be exercisable either in full or in installments at such time or times and
during such period as shall be set forth in the option agreement evidencing such
option, subject to the provisions of the Plan.  No option granted to a
Reporting Person for purposes of the Exchange Act, however, shall be exercisable
during the first six months after the date of grant.  Subject to the
requirements in the immediately preceding sentence, if an option is not at the
time of grant immediately exercisable, the Board of Directors may (i) in the
agreement evidencing such option, provide for the acceleration of the exercise
date or dates of the subject option upon the occurrence of specified events,
and/or (ii) at any time prior to the complete termination of an option,
accelerate the exercise date or dates of such option, unless it would cause an
option that otherwise qualified as an Incentive Stock Option to lose Incentive
Stock Option treatment by application of Section 422(d)(1) of the Code and
Section 11(c) of the Plan.

       

      9.
Non-transferability
of Options.

       

      No option granted under this Plan
shall be assignable or otherwise transferable by the optionee except by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined in the Code or Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), or the rules
thereunder.  An option may be exercised during the lifetime of the
optionee only by the optionee.  In the event an optionee dies during
his employment by the Corporation or any of its subsidiaries, or during the
three-month period following the date of termination of such employment, his
option shall thereafter be exercisable, during the period specified to the full
extent to which such option was exercisable by the optionee at the time of his
death during the periods set forth in Section 10 or 11(d).  If any
optionee should attempt to dispose of or encumber his or her options, other than
in accordance with the applicable terms of this Plan or the applicable option
agreement, his or her interest in such options shall
terminate.

       

      10.
Effect
of Termination of Employment or Other Relationship.

       

      Except as provided in Section 11(d)
with respect to Incentive Stock Options, and subject to the provisions of the
Plan and the applicable option agreement, an optionee may exercise an option
(but only to the extent such option was exercisable at the time of termination
of the optionee’s employment or other relationship with the Corporation) at any
time within three (3) months following the termination of the optionee's
employment or other relationship with the Corporation or within one (1) year if
such termination was due to the death or disability of the optionee, but, except
in the case of the optionee's death, in no event later than the expiration date
of the Option.  If the termination of the optionee's employment is for
cause or is otherwise attributable to a breach by the optionee of an employment
or confidentiality or non-disclosure agreement, the option shall expire
immediately upon such termination.  The Board of Directors shall have
the power to determine what constitutes a termination for cause or a breach of
an employment or confidentiality or non-disclosure agreement, whether an
optionee has been terminated for cause or has breached such an agreement, and
the date upon which such termination for cause or breach occurs.  Any
such determinations shall be final and conclusive and binding upon the
optionee.

       

      
        
          
          

        

        
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      11.
Incentive
Stock Options.

       

      Options granted under the Plan which
are intended to be Incentive Stock Options shall be subject to the following
additional terms and conditions:

       

      (a)           Express
Designation.  All Incentive Stock Options granted under the
Plan shall, at the time of grant, be specifically designated as such in the
option agreement covering such Incentive Stock Options.

       

      (b)           10%
Stockholder.  If any employee to whom an Incentive Stock Option
is to be granted under the Plan is, at the time of the grant of such option, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Corporation (after taking into account the
attribution of stock ownership rules of Section 424(d) of the Code), then the
following special provisions shall be applicable to the Incentive Stock Option
granted to such individual:

       

      
                                 
(i)        The purchase price
per share of the Common Stock subject to such Incentive Stock Option shall not
be less than 110% of the Fair Market Value of one share of 

                                            
Common Stock at the time of grant; and

      

       

      
                                 
(ii)        the option exercise
period shall not exceed five years from the date of grant  
..

      

       

      (c)           Dollar
Limitation.  For so long as the Code shall so provide, options
granted to any employee under the Plan (and any other incentive stock option
plans of the Corporation) which are intended to constitute Incentive Stock
Options shall not constitute Incentive Stock Options to the extent that such
options, in the aggregate, become exercisable for the first time in any one
calendar year for shares of Common Stock with an aggregate Fair Market Value, as
of the respective date or dates of grant, of more than $100,000 (or such other
limitations as the Code may provide).

       

      (d)           Termination
of Employment, Death or Disability.  No Incentive Stock Option
may be exercised unless, at the time of such exercise, the optionee is, and has
been continuously since the date of grant of his or her option, employed by the
Corporation, except that, unless otherwise specified in the applicable option
agreement:

       

      
                                 
(i)          an Incentive Stock
Option may be exercised within the period of three months after the date the
optionee ceases to be an employee of the Corporation (or within such lesser
period as may be specified in the applicable option agreement), provided,
that the agreement with respect to such option may designate a longer exercise
period and that the exercise after such three-month period shall be treated as
the exercise of a non-statutory option under the Plan;

      

       

      
                                 
(ii)          if the optionee
dies while in the employ of the Corporation, or within three months after the
optionee ceases to be such an employee, the Incentive Stock Option may be
exercised by the person to whom it is transferred by will or the laws of descent
and distribution within the period of one year after the date of death (or
within such lesser period as may be specified in the applicable option
agreement); and

      

       

      
                                 
(iii)         if
the optionee becomes disabled (within the meaning of Section 22(e)(3) of the
Code or any successor provisions thereto) while in the employ of the
Corporation, the Incentive Stock Option may be exercised within the period of
one year after the date the  optionee ceases to be such an employee because
of such disability (or within such lesser period as may be specified in the
applicable option agreement).

      

       

      For all purposes of
the Plan and any option granted hereunder, "employment" shall be defined in
accordance with the provisions of Section 1.421-1(h) of the Income Tax
Regulations (or any successor regulations).  Notwithstanding the
foregoing provisions no Incentive Stock Option may be exercised after its
expiration date.

       

      12.
Restricted
Shares.

       

      (a)          
Awards.  The
Board of Directors may from time to time in its discretion award Restricted
Shares to persons having a Business Relationship with the Corporation and may
determine the number of Restricted Shares awarded and the terms and conditions
of, and the amount of payment, if any, to be made by such
persons.  Each award of Restricted Shares will be evidenced by a
written agreement executed on behalf of the Corporation and containing terms and
conditions not inconsistent with the Plan as the Board of Directors shall
determine to be appropriate in its sole discretion.

       

      (b)           Restricted
Period; Lapse of Restrictions.  At the time an award of
Restricted Shares is made, the Board of Directors shall establish a period of
time (the “Restricted Period”) applicable to such award which shall not be more
than ten years.  Each award of Restricted Shares may have a different
Restricted Period.  In lieu of establishing a Restricted Period, the
Board of Directors may establish restrictions based only on the achievement of
specified performance measures or a time release schedule.  At the
time an award is made, the Board of Directors may, in its discretion, prescribe
conditions for the incremental lapse of restrictions during the Restricted
Period and for the lapse or termination of restrictions upon the occurrence of
other conditions in addition to or other than the expiration of the Restricted
Period with respect to all or any portion of the Restricted
Shares.  Such conditions may include, without limitation, the death or
disability of the participant to whom Restricted Shares are awarded, retirement
of the participant pursuant to normal or early retirement under any retirement
plan of the Corporation or termination by the Corporation of the participant’s
employment other than for cause, or the occurrence of a change in control of the
Corporation.  Such conditions may also include performance measures,
which, in the case of any such award of Restricted Shares to a participant who
is a “covered employee” within the meaning of Section 162(m) of the Code, shall
be based on one or more of the following criteria:  earnings per
share, market value per share, return on invested capital, return on operating
assets and return on equity.  The Board of Directors may also, in its
discretion, shorten or terminate the Restricted Period or waive any conditions
for the lapse or termination of restrictions with respect to all or any portion
of the Restricted Shares at any time after the date the award is
made.

       

      (c)           Rights
of Holder; Limitations Thereon.  Upon
an award of Restricted Shares, a stock certificate representing the number of
Restricted Shares awarded to the participant shall be registered in the
participant’s name and, at the discretion of the Board of Directors, will be
either delivered to the participant with an appropriate legend or held in
custody by the Corporation or a bank for the participant’s
account.  The participant shall generally have the rights and
privileges of a stockholder as to such Restricted Shares, including the right to
vote such Restricted Shares, except that the following restrictions shall apply:
(i) with respect to each Restricted Share, the participant shall not be entitled
to delivery of an unlegended certificate until the expiration nor termination of
the Restricted Period, and the satisfaction of any other conditions prescribed
by the Board of Directors, relating to such Restricted Share; (ii) with respect
to each Restricted Share, such share may not be sold, transferred, assigned,
pledged, or otherwise encumbered or disposed of until the expiration of the
Restricted Period, and the satisfaction of any other conditions prescribed by
the Board of Directors, relating to such Restricted Share (except, subject to
the provisions of the participant’s stock restriction agreement, by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA or the rules promulgated
thereunder) and (iii) all of the Restricted Shares as to which restrictions have
not at the time lapsed shall be forfeited and all rights of the participant to
such Restricted Shares shall terminate without further obligation on the part of
the Corporation unless the participant has remained in a Business Relationship
with the Corporation or any of its subsidiaries until the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Board of Directors applicable to such Restricted
Shares.  Upon the forfeiture of any Restricted Shares, such forfeited
shares shall be transferred to the Corporation without further action by the
participant.  At the discretion of the Board of Directors, cash and
stock dividends with respect to the Restricted Shares may be either currently
paid or withheld by the Corporation for the participant’s account, and interest
may be paid on the amount of cash dividends withheld at a rate and subject to
such terms as determined by the Board of Directors.  The participant
shall have the same rights and privileges, and be subject to the same
restrictions, with respect to any shares received pursuant to Section 16
hereof.

       

      (d)           Delivery
of Unrestricted Shares.  Upon
the expiration or termination of the Restricted Period and the satisfaction of
any other conditions prescribed by the Board of Directors, the restrictions
applicable to the Restricted Shares shall lapse and a stock certificate for the
number of Restricted Shares with respect to which the restrictions have lapsed
shall be delivered, free of all such restrictions, except any that may be
imposed by law including without limitation securities laws, to the participant
or the participant’s beneficiary or estate, as the case may be.  The
Corporation shall not be required to deliver any fractional share of Common
Stock but will pay, in lieu thereof, the fair market value (determined as of the
date the restrictions lapse) of such fractional share to the participant or the
participant’s beneficiary or estate, as the case may be.

       

      
        
          
          

        

        
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      13.
Additional
Provisions.

       

      (a)           Additional
Provisions.  The Board of Directors may, in its sole
discretion, include additional provisions in option or Restricted Stock
agreements covering options or Restricted Stock granted under the Plan,
including without limitation, restrictions on transfer, repurchase rights,
rights of first refusal, commitments to pay cash bonuses, to make, arrange for
or guaranty loans or to transfer other property to optionees upon exercise of
options, or such other provisions as shall be determined by the Board of
Directors; provided,
that such additional provisions shall not be inconsistent with any other term or
condition of the Plan and such additional provisions shall not cause any
Incentive Stock Option granted under the Plan to fail to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code or result in the
imposition of an additional tax under Section 409A of the
Code.

       

      (b)           Acceleration,
Extension, Etc.  The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised if it would not cause any Incentive Stock Option granted
under the Plan to fail to qualify as an Incentive Stock Option within the
meaning of Section 422 of the Code or result in the imposition of an additional
tax under Section 409A of the Code.

       

      14. General
Restrictions.

       

      (a)           Investment
Representations.  The Corporation may require any person to
whom Restricted Shares or an option is granted, as a condition of receiving such
Restricted Shares or exercising such option, to give written assurances in
substance and form satisfactory to the Corporation to the effect that such
person is acquiring the Restricted Shares or Common Stock subject to the option
for his or her own account for investment and not with any present intention of
selling or otherwise distributing the same, and to such other effects as the
Corporation deems necessary or appropriate in order to comply with federal and
applicable state securities laws, or with covenants or representations made by
the Corporation in connection with any public offering of its Common
Stock.

       

      (b)           Compliance
with Securities Law.  Each option and grant of Restricted
Shares shall be subject to the requirement that if, at any time, counsel to the
Corporation shall determine that the listing, registration or qualification of
the Restricted Shares or shares subject to such option upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is necessary as a
condition of, or in connection with the issuance or purchase of shares
thereunder, such Restricted Shares shall not be granted and such option may not
be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Board of
Directors.  Nothing herein shall be deemed to require the Corporation
to apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.

       

      15.
Rights
as a Stockholder.

       

      The holder of an option shall have
no rights as a stockholder with respect to any shares covered by the option
(including, without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares) until the date of issue of a stock
certificate to him or her for such shares.  No adjustment shall be
made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.

       

      
        16.
Adjustment
Provisions for Recapitalization, Reorganizations and Related
Transactions.

      

       

      (a)           Recapitalization
and Related Transactions.  If, through or as a result of any
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities of the Corporation, or (ii) additional shares or new or
different shares or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of shares reserved
for issuance under the Plan, (y) the number and kind of Restricted Shares
granted and shares or other securities subject to any then outstanding options
under the Plan, and (z) the exercise price for each share subject to any then
outstanding options under the Plan, without changing the aggregate purchase
price as to which such options remain exercisable.  Notwithstanding
the foregoing, no adjustment shall be made pursuant to this Section 16 if such
adjustment (i) would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 or (ii) would be considered as the adoption of a new
plan requiring stockholder approval.

       

      (b)           Reorganization,
Merger and Related Transactions.  If the Corporation shall be
the surviving corporation in any reorganization, merger or consolidation of the
Corporation with one or more other corporations, any then outstanding Restricted
Shares or option granted pursuant to the Plan shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
such Restricted Shares or options would have been entitled immediately following
such reorganization, merger, or consolidation, with a corresponding
proportionate adjustment of the purchase price as to which such options may be
exercised so that the aggregate purchase price as to which such options may be
exercised shall be the same as the aggregate purchase price as to which such
options may be exercised for the shares remaining subject to the options
immediately prior to such reorganization, merger, or
consolidation.

       

      (c)  Board
Authority to Make Adjustments.  Any adjustments made under this
Section 16 will be made by the Board of Directors, whose determination as to
what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive.  No fractional shares will be issued under the
Plan on account of any such adjustments.

       

      
        17.
Merger,
Consolidation, Asset Sale, Liquidation, Etc.

      

       

      (a)           General.  In
the event of a consolidation or merger in which the Corporation is not the
surviving corporation, or sale of all or substantially all of the assets of the
Corporation in which outstanding shares of Common Stock are exchanged for
securities, cash or other property of any other corporation or business entity
or in the event of a liquidation of the Corporation (collectively, a "Corporate
Transaction"), the Board of Directors of the Corporation, or the board of
directors of any corporation assuming the obligations of the Corporation, may,
in its discretion, take any one or more of the following actions, as to
outstanding options: (i) provide that such Restricted Shares or options shall be
assumed, or equivalent Restricted Shares or options shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), provided
that any such options substituted for Incentive Stock Options shall meet the
requirements of Section 424(a) of the Code, (ii) upon written notice, provide
that all unexercised options and Restricted Shares will terminate immediately
prior to the consummation of such transaction unless such options are exercised
by the optionee within a specified period following the date of such notice,
(iii) in the event of a Corporate Transaction under the terms of which holders
of the Common Stock of the Corporation will receive upon consummation thereof a
cash payment for each share surrendered in the Corporate Transaction (the
"Transaction Price"), make or provide for a cash payment to the optionees equal
to the difference between (A) the Transaction Price times the number of shares
of Common Stock subject to such outstanding options (to the extent then
exercisable at prices not in excess of the Transaction Price) and (B) the
aggregate exercise price of all such outstanding options in exchange for the
termination of such options, and (iv) provide that all restrictions on
Restricted Shares shall lapse in full or in part and all or any outstanding
options shall become exercisable in full or in part immediately prior to such
event.

       

      (b)           Substitute
Restricted Shares or Options.  The Corporation may grant
Restricted Shares or options under the Plan in substitution for Restricted
Shares or options held by persons in a Business Relationship with another
corporation who enter into a Business Relationship with the Corporation, or a
subsidiary of the Corporation, as the result of a merger or consolidation of the
employing corporation with the Corporation or a subsidiary of the Corporation,
or as a result of the acquisition by the Corporation, or one of its
subsidiaries, of property or stock of the other corporation.  The
Corporation may direct that substitute Restricted Shares or options be granted
on such terms and conditions as the Board of Directors considers appropriate in
the circumstances.

       

      
        
          
          

        

        
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      18.
No
Special Employment Rights.

       

      Nothing contained in the Plan or in
any Restricted Share or option agreement shall confer upon any holder of
Restricted Shares or optionee any right with respect to the continuation of his
or her employment by, or other Business Relationship with, the Corporation or
interfere in any way with the right of the Corporation at any time to terminate
such employment or Business Relationship or to increase or decrease the
compensation of the optionee.

       

      19.
Other
Employee Benefits.

       

      Except as to plans which by their
terms include such amounts as compensation, the amount of any compensation
deemed to be received by an employee as a result of the grant of Restricted
Shares or lapse of restrictions thereon, the exercise of an option or the sale
of shares received upon such exercise will not constitute compensation with
respect to which any other employee benefits of such employee are determined,
including, without limitation, benefits under any bonus, pension,
profit-sharing, life insurance or salary continuation plan, except as otherwise
specifically determined by the Board of Directors.

       

      20. Amendment
of the Plan.

       

      (a)           The
Board of Directors may at any time, and from time to time, modify or amend the
Plan in any respect, except that if at any time the approval of the stockholders
of the Corporation is required under Section 422 of the Code or any successor
provision with respect to Incentive Stock Options, or the legal requirements
relating to the administration of equity compensation plans, if any, under
applicable provisions of federal securities laws, applicable state corporate and
securities laws, the Code, the rules of any applicable stock exchange or
national market system or quotation system on which the Common Stock is listed
or quoted, and the applicable laws and rules of any foreign country or
jurisdiction where awards are, or will be, granted under the
Plan.

       

      (b)           The
termination or any modification or amendment of the Plan shall not, without the
consent of an optionee or holder of Restricted Shares, affect his or her rights
under an option or grant of Restricted Shares previously granted to him or
her.  With the consent of the optionee or holder of Restricted Shares
affected, the Board of Directors may amend outstanding option or Restricted
Share agreements in a manner not inconsistent with the Plan.  The
Board of Directors shall have the right to amend or modify the terms and
provisions of the Plan and of any outstanding Incentive Stock Options granted
under the Plan to the extent necessary to qualify any or all such options for
such favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code.

       

      21. Withholding.

       

      (a)           The
Corporation shall have the right to deduct from payments of any kind otherwise
due to the optionee or holder of Restricted Shares any federal, state or local
taxes of any kind required by law to be withheld with respect to any shares
issued upon exercise of options or lapse of restrictions on Restricted Shares
under the Plan.  Subject to the prior approval of the Corporation,
which may be withheld by the Corporation in its sole discretion, the optionee or
holder of Restricted Shares may elect to satisfy such obligations, in whole or
in part, (i) by causing the Corporation to withhold shares of Common Stock
otherwise issuable pursuant to the exercise of an option or lapse of
restrictions on Restricted Shares or (ii) by delivering to the Corporation
shares of Common Stock already owned by the optionee or holder of Restricted
Shares.  The shares so delivered or withheld shall have a Fair Market
Value equal to such withholding obligation as of the date that the amount of tax
to be withheld is to be determined.  An optionee who has made an
election pursuant to this Section 21(a) may satisfy his or her withholding
obligation only with shares of Common Stock which are not subject to any
repurchase, forfeiture, unfulfilled vesting or other similar
requirements.

       

      (b)           The
acceptance of shares of Common Stock upon exercise of an Incentive Stock Option
shall constitute an agreement by the optionee (i) to notify the Corporation if
any or all of such shares are disposed of by the optionee within two years from
the date the option was granted or within one year from the date the shares were
transferred to the optionee pursuant to the exercise of the option, and (ii) if
required by law, to remit to the Corporation, at the time of and in the case of
any such disposition, an amount sufficient to satisfy the Corporation's federal,
state and local withholding tax obligations with respect to such disposition,
whether or not, as to both (i) and (ii), the optionee is in the employ of the
Corporation at the time of such disposition.

       

      (c)           Notwithstanding
the foregoing, in the case of a Reporting Person whose options have been granted
in accordance with the provisions of Section 3(b) herein, no election to use
shares for the payment of withholding taxes shall be effective unless made in
compliance with any applicable requirements of Rule 16b-3.

       

      22.Section
162(m) of the Code.  

       

                  
The Board of Directors, in its sole discretion, may require that one or
more agreements contain provisions which provide that, in the event Section
162(m) of the Code, or any successor provision relating to excessive employee
remuneration, would operate to disallow a deduction by the Corporation for all
or part of any payment of an award under the Plan, a grantee’s receipt of the
portion that would not be deductible by the Corporation shall be deferred to
either the earliest date at which the Board reasonably anticipates that the
grantee's remuneration either does not exceed the limit set forth in Section
162(m) of the Code or is not subject to Section 162(m) of Code, or the calendar
year in which the grantee separates from service.  This Section 22
shall be applied and construed consistently with Section 409A of the Code and
the regulations (and guidance) thereunder.

       

      23. Effective
Date and Duration of the Plan.

       

      (a)           Effective
Date.  The Plan shall become effective when adopted by the
Board of Directors, but no Incentive Stock Option granted under the Plan shall
become exercisable unless and until the Plan shall have been approved by the
Corporation's stockholders.  If such stockholder approval is not
obtained within twelve (12) months after the date of the Board's adoption of the
Plan, no options previously granted under the Plan shall be deemed to be
Incentive Stock Options and no Incentive Stock Options shall be granted
thereafter.  Amendments to the Plan not requiring stockholder approval
shall become effective when adopted by the Board of Directors; amendments
requiring stockholder approval (as provided in Section 20) shall become
effective when adopted by the Board of Directors, but no Incentive Stock Option
granted after the date of such amendment shall become exercisable (to the extent
that such amendment to the Plan was required to enable the Corporation to grant
such Incentive Stock Option to a particular optionee) unless and until such
amendment shall have been approved by the Corporation's
stockholders.  If such stockholder approval is not obtained within
twelve (12) months of the Board's adoption of such amendment, any Incentive
Stock Options granted on or after the date of such amendment shall terminate to
the extent that such amendment to the Plan was required to enable the
Corporation to grant such option to a particular optionee.  Subject to
this limitation, options may be granted under the Plan at any time after the
effective date and before the date fixed for termination of the
Plan.

       

      (b)           Termination.  Unless
sooner terminated in accordance with Section 17, the Plan shall terminate upon
the earlier of (i) the close of business on the day next preceding the tenth
anniversary of the date of its adoption by the Board of Directors, or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to the exercise or cancellation of Restricted Shares or options
granted under the Plan.  If the date of termination is determined
under (i) above, then Restricted Shares or options outstanding on such date
shall continue to have force and effect in accordance with the provisions of the
instruments evidencing such Restricted Shares or options.

       

      24. Governing
Law.

       

                 
The provisions of this Plan shall be governed and construed in accordance with
the laws of the State of Nevada without regard to the principles of conflicts of
laws.

       

       Adopted by the
Board of Directors on March 6, 2010

       

       

       


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